A great social thinker and reformer

Many people thought that he would get the Nobel Prize in economics. Even the former US President Bill Clinton in his autobiography was of the view that Dr Yunus should have won the Nobel Prize in economics many years ago. But, personally, I never subscribed to this view for my own reasons and way of thinking. I said to myself: "If Dr Yunus ever gets the Nobel Prize, he will get it for peace."

On occasions in the past I had discussions with some close associates in Canberra on Dr Yunus's prospects of winning a Nobel Prize. In these social discussions I expressed my opinion that while he was an economics professor at a university, and is considered as an economist, Dr Yunus basically created a unique social institution, with the effective management of micro-credit, that has helped the poor to come out of poverty and lead a decent life.

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Dr Yunus's success has long been recognised, so the model is now adopted in many countries as a strategy to reduce and eradicate poverty. To me, the Grameen Bank's mission is peace through eradication of poverty. This boils down to the point that social security depends, to a large extent, on economic security.

Micro-credit itself is not a new concept invented by Dr Yunus and the Grameen Bank. The credit system, called "mahajani loan," which has been in pratice for many decades in Bangladesh is basically micro-credit (this loan is often provided with a simple hand note as a collateral), and the loans that were extended by the legendary Kabuliwalas during the British rule in India, and even after the partition of India, were nothing but micro-credit. But these kinds of loans are exploitative in nature, having no involvement of any institutional arrangements. And these, mostly, went against the interests of the poor in terms of further deterioration of their economic and social conditions.

In my view, the biggest achievement of Dr Muhammad Yunus is that he rightly understood that man is a social animal, and developed an economic incentive structure linked with the social behaviour of men (and, for that matter, women). Through his social experiment with institution building he has influenced the group behaviour of the poor, and he has structured his credit programme in a way that enables the poor borrowers, especially the women, to take responsibility and be accountable for their work. The group incentive structure of the Grameen Bank is what has made his social experiment a success that has changed the lives of millions of people.

To me, the winning of the Nobel Peace Prize by Dr Yunus is an embodiment of the self-confidence and determination achieved by the poor in raising their own standards of living with a small supervised credit. This was unthinkable few decades ago.

The Nobel Prize citation, inter alia, states "to create economic and social development from below" is suggestive of the poor people's efforts to fully participate in economic opportunities if the right incentive structures and institutional regimes are made available. The award also implies that social institutions can survive only if real and sustainable benefits are secured for those whom the institutions are meant to serve.

Globalisation has had significant impact on people's lives all over the world. The world has become smaller, so to speak, with the rapidly changing communications technology, and has become more integrated with free movement of capital, human resources and technology of all kinds.

While the onslaught of globalisation has led to adverse consequences for some countries and groups of people in those countries, many of the poor people have gainfully exploited the opportunities provided by globalisation. The opportunities associated with the wide-spread use of modern technology, such as the mobile phone, are a case in point, and Grameen Phone is a shining example of this.

The Grameen Bank clients have benefited from the use of mobile phones in terms of further economic development. Globalisation means integration of activities, far and wide. Nowadays, the macro dimensions of world economics can be strongly linked with the micro dimensions prevailing in a village in Bangladesh, or elsewhere.

The Grameen Bank's activities are not about "reverse globalisation," rather they are about "stronger globalisation" because people of different economic and social status can exploit the opportunities to participate as global citizens in many activities if they are supported by the right institutional arrangements. These arrangements do not necessarily have to be provided by the government; they can be developed and nurtured through social institutions as the Grameen Bank has vividly demonstrated.

Very often, especially in developing countries such as Bangladesh, the rules and regulations made by governments stand in the way of economic and social advancement of the people they are elected to serve. This view was also expressed by Dr Muhammad Yunus at an NTV interview, on October 13, after he had won the Nobel Prize.

I think the reasons behind the barriers imposed by the government have to do with the traditional social norms of holding authority to establish control so that vested interests are served. The government is a necessary evil in some respects. So we cannot do without the government, even though we may not like many of its policies and actions. However, what Dr Yunus and the Grameen Bank have shown is that even in case of monumental governmental barriers, under certain social conditions, people can move forward if they are given the chance.

In fine, I consider Dr Yunus as a great social thinker and reformer who has developed a sustainable social institution like the Grameen Bank that will continue to work for the poor in Bangladesh, as well as in many other countries around the world. The award of the Nobel Peace Prize recognises his lasting contribution to the enhancement of human welfare, especially of the poorest of the poor.

Abdul Quader is a freelance contributor to The Daily Star.