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Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Friday, October 13, 2006

"Lasting Peace" Requires People "To Break Out of Poverty"

Mother Crafton's eMo today about the Nobel Peace Prize tells how excited I am that Muhammad Yunus and the Grameen Bank have been honored and rewarded in their work to alleviate poverty of the deepest kind in one of the poorest places on Earth. Although Yunus is an economist, they did not receive the Nobel Prize in Economics; they received the Nobel Peace Prize.

First, it is important to notice that the award is dual: it will be split between Dr. Yunus, the founder of the Bank, and the Bank itself. It is hardly surprising that a leader of Dr. Yunus's stature has been recognized. He has great insight and great ability, including the ability to develop talent in others so they can manage the Bank's operations with him. He also has the kind of ego to let go so those people can do just that.

The honor to the Bank itself is a singular statement about the people of Bangladesh. The Grameen Bank is owned 6% by the government of Bangladesh and 94% by the "members" of the Bank, the very poor people who borrow from it. These people, through the business they conduct in the unique institution they have made, share in the Nobel Peace Prize.

We have talked twice here about the book on the Grameen Bank, The Price of a Dream by David Bornstein. The first time, on June 27, we recommended the book because of the stories it tells, or rather, the way Bornstein composes it to let the people tell the stories of their hard work. They would try to manage some small business in their village to earn money, but three-quarters of the profit had to go to the loan shark who would only give them credit at some astronomical interest rate. No financial institution of any status would deal with them because, well, they were poor. But the financing they could get was so expensive that they still couldn't break out of their poverty.

But the people of Bangladesh are people just like other people. It may be a tough climate, with flooding and terrible heat. There may be a war in that volatile territory every other decade or so, so that no one can settle down long enough to get a good life established. They may have lived under great oppression, especially the women. But they are still people who respond to incentives just like any of us. And they still want their children to have it better than they do. They will stretch and grow to reach their goals, just like we will if we are challenged.

The second time we called your attention to The Price of a Dream was near September 11, when we described how the Grameen Bank's micro-credit operation was helping people help themselves, so their lives might move forward instead of drifting toward the lures of terrorism. The Grameen Bank does not have a top-down structure. The vast majority of lending decisions are made in the village by organized groups of villagers who administer the loans the Bank makes to them and their neighbors. There is both social pressure and support from your dearest friends for you to succeed. You have to pay the loan back, so you must do something productive with the money. You will. For the first few years, meetings of the village groups concluded with a "salute". This has been dropped because it seemed too militaristic, but one of the purposes it served was to make the women raise their eyes and look the group leader straight in the face, a posture they would never take with their husband or other "over-lord". And the men who borrow must take direction from any woman who is conducting the Bank's business.

The Nobel Committee saw all this and praised it. Their citation says, "Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development."

Mother Crafton made a typo in her eMo today. She wrote, "Congratulations to Bangladesh's Dr. Muhammad Yunus, our newest Noble laureate, and a most worthy one." Noble, indeed.


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