"Muhammad Yunus an Economics for Peace" by Farida Khan

1. Mahatma Gandhi Arts, Science & Late N. P. Commerce College,
Armori, Dist. Gadchiroli
Class :- B. A. – II ( Sem. – IV )
Subject :- Compulsory English
Topic :-Muhammad Yunus: An Economics for Peace
- Frida Khan
-Prepared By-
Asst. Prof. Anil P. Raut

2. Muhammad Yunus: An Economics for Peace
- Frida Khan
About the Title:-
Muhammad Yunus:-
 A Bangladeshi Social Entrepreneur, Banker, Economist an d Civil Society Leader
 Awarded with the Nobel Prize for founding Grameen Bank and Pioneering the concepts microcredit and
microfinance
 Along with Muhammad Yunus, Grameen Bank was also awarded the Nobel Peace Prize in 2006 for their
work to “create economic and social development from below”.
 Grameen Bank’s objective since its establishment in 1983 has been to grant poor people small loans on
easy terms – so-
called micro-credit.
Economics:-
The study or principles of the way money, business and industry are organized.
Peace:-
the state of being calm or quiet

3.  About the Author:-
 Dr. Farida Khan
 Professor of Economics
 Co-Director, Center of International Studies, University of Wisconsin-Parkside, USA
 Worked on International Trade Policy and the developments in South Asia and Bangladesh
 Worked on the topics related to capital goods, micro-credit, and gender
 Also worked on environmental issues connected to indigenous peoples of India and Bangladesh
 Consulted with the World Bank and with local law firms regarding economic issues
 Interested in economic development issues in least developed countries or Asian countries
About the Author:-
 Dr. Farida Khan
 Professor of Economics
 Co-Director, Center of International Studies, University of Wisconsin-Parkside, USA
 Worked on International Trade Policy and the developments in South Asia and Bangladesh
 Worked on the topics related to capital goods, micro-credit, and gender
 Also worked on environmental issues connected to indigenous peoples of India and Bangladesh
 Consulted with the World Bank and with local law firms regarding economic issues
 Interested in economic development issues in least developed countries or Asian countries

4. About the Article / Text: -
 Remarkable story about the great efforts made by Muhammad Yunus, the economist for peace,
 Built the new economy with microcredit systems.
 Succeeded in lessening the evils of poverty through a unique method.
 His story is one of the innovations for the benefit of humanity, dedication and concern for the world.

5. TEXT
Muhammad Yunus: An Economics for Peace
- Frida Khan
The Bangladeshi microcredit pioneer Muhammad Yunus is the first economist to win a Nobel
peace prize. This is in itself worthy of examination; a curiosity. How has economics cultivated
peace? The economic reasons for war are far better known, as is the knowledge that wars have
been instrumental in sustaining economic growth rates, providing jobs, and ameliorating the
problem of insufficient demand. So, what is this newfound relationship between economics and
peace? And why has Professor Yunus, along with the Grameen Bank he founded,
been awarded this prize?
The Nobel peace prize is given to “the person who shall have done the most or the best work for
fraternity among nations, for the abolition or reduction of standing armies and for the holding
and promotion of peace congresses.” It is awarded by a five-member the Norwegian Nobel
committee appointed by Norway’s Storting (parliament). The economics prize, on the other
hand is funded by the Sveriges Riksbank and awarded by the Royal Swedish Academy of
Sciences.

6. The 2006 Nobel committee said that the prize was given to Muhammad Yunus and to Grameen
Bank of Bangladesh for their efforts to create economic and social development from below.
Lasting peace, the formal announcement said, cannot be achieved unless large population
groups find ways in which to break out of poverty; microcredit is one means to achieve this,
serving therefore “to advance democracy and human rights.”
 A banker to the poor:-
What have Grameen Bank and Muhammad Yunus done? What kind of connection can be made
between banking, democracy, and peace? The Yunus-Grameen story is indeed unique. It begins
with Muhammad Yunus’s return to Bangladesh after completing his doctorate in economics and
then teaching at Middle Tennessee State University in the United States. Yunus had been
guided in this path by Nicholas Georgescu-Roegen, a unique thinker who created “evolutionary
economics” and influenced Yunus in ways that would help him develop the ideas behind
Grameen. Georgescu-Roegen made Yunus understand that without the human side, “economics
is just as hard and dry as stone.”

7. Yunus returned in 1972 to the newly independent country and began teaching in Chittagong
University. During the famine of 1974, he was very troubled by the disjuncture between
academic economics and the reality of people dying from hunger. He found it difficult to teach
the elegant economic models which were supposed to alleviate destitution.
At this time, he came upon Sufia Khatun, a local woman from the village of Jobra, who was
weaving and selling cane stools. She had to borrow from the local moneylender to purchase raw
materials and made a profit of a penny on each stool. Yunus decided to cut through the
monopoly power of usurious lenders and increase her income. He gathered his students to
witness a true lesson in economic development, as he lent money to Sufia and forty-one others
for their business projects.
Yunus poetically described what followed: “When she finally receives the twenty-five dollars,
she is trembling. The money burns her fingers. Tears roll down her face. She has never seen so
much money in her life. She never imagined it in her hands. She carries the bills as she would a
delicate bird or a rabbit, until someone advises her to put the money away in a safe place lest it
be stolen.”

8. This led to the establishment of an innovative group-lending system where staggered, collateral
interest-free loans were made to group members who were collectively responsible for
repayment. The Grameen Bank was formally founded in 1976 and is owned by its borrowers.
What was astounding was the success of the organization in strict banking terms. Grameen’s
initial repayment rates were at 97%, comparable to the most conservative of the large global
banks. What was distinctly unusual was its clientele - 95% were women who owned less than
half an acre of land.
The formation of groups to borrow Grameen funds became a way to empower women. Being
able to borrow and have their own enterprises for income led to greater agency among women -
giving them far more power and say within households, more education for their children, and
asset-building for “hard core” poor households. At the same time, it resulted in objections and
resistance from male spouses and family members, and village power-mongers such as religious
leaders.

9. The Grameen Bank went further than promoting financial and individual empowerment. It had a
deliberate intention to raise social consciousness. Many say that Grameen has helped build a
relationship of trust among the rural women and the bankers - a new form of social capital in the
face of increased fragmentation and destruction of traditional networks. What is without doubt is
that Grameen is an instance of economics confronting power.
The success of Grameen was replicated in rural Arkansas when Bill Clinton was governor. The
Arkansas Good Faith Fund model was further copied by South Shore Bank and the Small
Business Administration in the inner-city areas of Chicago. Indeed, since the 1970s, the
microcredit idea originating with Grameen Bank has been used everywhere - there is probably
not a single developing country in the world where microcredit has not been tried as a measure
to counter poverty.
The World Bank had experimented with poverty alleviation for decades - now it funds many
schemes incorporating microcredit, both in Bangladesh and around the globe. A media-friendly
personality, Professor Yunus has spread the idea of microcredit far and wide and tirelessly
advocated the notion that credit is a human right

10. Grameen has moved on to other areas by providing housing loans, information technology to
rural women entrepreneurs through mobile telephones, introducing pension schemes, and
reviving the production and marketing of handloom through the introduction of the “Grameen
check”, now a popular fabric sold at urban retail stores in Bangladesh targeted to middle-class
consumers.
Muhammad Yunus’s knack of finding and applying the right business ideas for rural Bangladesh
is what makes him a remarkable development economist. His love for the village and feel for
how the rural poor live shines through in his economic experiments. Indeed, Yunus’s programme
for alleviating poverty could equally have won him the 2006 Nobel prize in economics.
As banks tighten their credit in a privatised world, increasing poverty, misery, and crime in the
process, microcredit, NGOs, and the peacemakers will have to do their job, band aid as it may
be, to make sure that the violence of starvation and poverty is not perpetuated by global
governments who have now all agreed to live by the uniform code of neo-liberalism.

11. Thank
You