Nobel Peace Prize winner Dr. Muhammad Yunus Interview on CNN

Nobel Peace Prize winner Dr. Muhammad Yunus InterviewCNN Talk Asia had an interview yesterday with Dr. Muhammad Yunus, the Bangladeshi winner of the 2006 Nobel Peace Prize. His initiatives in microcredit eventually gave birth to Grameen Bank, which has issued over $5 billion in loans to millions of people since 1976. Grameen uses the system of solidarity lending to ensure the loans get repaid. Under this system, solidarity groups act as a distribution channel, leveraging “various types of social capital like peer pressure, mutual support and a healthy culture of repayment”.

Dr. Yunus describes this method of lending in his book Banker to the Poor: Micro-lending and the battle against world poverty:
 

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Group membership not only creates support and protection but also smoothes out the erratic behavior patterns of individual members, making each borrower more reliable in the process. Subtle and at times not-so-subtle peer pressure keeps each group member in line with the broader objectives of the credit program…Because the group approves the loan request of each member, the group assumes moral responsibility for the loan. If any member of the group gets into trouble, the group usually comes forward to help.
 

The CNN interview points out that the Bangladeshi model has not been very successfully applied to other countries. I believe the reason why it is so successful in Asia is due to the cultural inter-connectedness that exists between family, tribal, and village groups (which also trickles up to the national level in many cases). It’s this cultural distinction, one which is very visible here in Bangladesh, that allows the leveraging of peer pressure, et al. to work. In Western cultures, the individualization of society and the “mind your own business” attitude prevalent in the culture makes the idea of joint liability untenable.

Take the photo below, for example. Can you imagine Westerners at any level of society sitting down calmly as a group and hearing criticism and advice from people in their community about their personal spending/budgeting choices? I can’t, because that’s exactly how Westerners see those choices, as personal.




Economically, individualist societies have been successful in many ways, and failed miserably in others. Individuals have built massive fortunes, and Western nations have grown rich because those fortunes have had an impact on the economy as a whole, creating jobs and industries as those individuals sought to increase their wealth even more. But can you imagine the power of a society who pulls itself up by the bootstraps and where wealth is a social, rather than an individual, responsibility? Where people care about the wisdom of each other’s financial decisions because they know that those decisions affect the entire group? If efforts like this one are successful, countries like Bangladesh will be well on the road to establishing solid social wealth, rather than the ephemeral fortunes of the individualist societies, which can collapse at the mere sneeze of a stock exchange.

The example of social responsibility for each other’s wealth was set by the early Church in Acts 4 (which might additionally explain why it works so well):

“(32) All the believers were one in heart and mind. No one claimed that any of his possessions was his own, but they shared everything they had. (33) With great power the apostles continued to testify to the resurrection of the Lord Jesus, and much grace was upon them all. (34) There were no needy persons among them. For from time to time those who owned lands or houses sold them, brought the money from the sales (35) and put it at the apostles’ feet, and it was distributed to anyone as he had need. (36) Joseph, a Levite from Cyprus, whom the apostles called Barnabas (which means Son of Encouragement), (37) sold a field he owned and brought the money and put it at the apostles’ feet.”

While the early Church took this idea of social wealth seriously (to the extreme), it’s easy to see how the preoccupation with one’s society and with their needs directly affects the success of an economic endeavor such as microcredit and solidarity groups. If you care about your society and realize the impact that your pooled wealth and resources can have, you go out of your way to help meet the needs of those around you to help them make wise financial decisions.

In this same spirit, Yunus’ next book, Creating a World Without Poverty: How Social Business Can Transform Our Lives, is coming out on December 31, 2007. It outlines his vision for social business, which he briefly refers to in his CNN interview:

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Today, the concept of business is to make money. Making money is the name of the business. And profit maximization is the mission of business. And I’m saying this is very narrow interpretation of human being. Human beings are much bigger than just making money. So I said, to be true to the human nature, we should include at least one more type of business, business to do good to people, without an expectation of making any personal gain out of it.

 

A business to do good to people. Coming from a Western background, those words sound oddly (and yet wonderfully) put together. And the reason is, this is what companies’ marketing departments want you to believe is going on today. “We’re providing a wonderful service to humanity and feeding the hungry children of the world…with our new low-fat-low-carb-zero-calorie-nutrient-free McBamboozle!” Advertising agencies responsible for companies in every industry sell the lie that the company is looking out for the best interests of mankind. And in our societies, most of us know they are lying, but we still drink the advertising up and end up using it to make excuses for our own irresponsible extravagance. “Yes, I really should buy that 80-inch plasma because the manufacturer will donate .005% of the profits to charity! I’m doing a good thing!” Imagine how much more you could do if you spent that $10,000 in positively affecting people’s lives in your own community or even in a community across the world (like Bangladesh)!

In our short time here Taara and I have already been exposed to so many ways in which even small amounts of money can make a huge difference in Bangladeshi society. It is time for the followers of Christ to draw themselves nearer to the example of the early Church and to really start caring about the society they live in, about the needs of the people who surround them, and about their own financial responsibilities to those needs. And as the world gets smaller and economies become interconnected, we must open our eyes to the fact that our “society”, in an ever-increasing multiplicity of ways, is now the entire world, not just our village or tribe. Our action (or inaction) can, and does, affect people all the way around the world. Knowing that, what will you do?





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