NOBEL FOR ENDING POVERTY, CREATING pEACE

On Friday, October 13th, 2006 the Nobel Prize for Peace was awarded to the Grameen Bank of Bangladesh, and its founder, Muhammad Yunus, for their efforts to end poverty by providing small loans to the world’s poorest people. Citizens for Global Solutions congratulates Muhammad Yunus and the Grameen Bank for their work and we applaud the Nobel Committee for recognizing that lasting peace cannot be achieved in a world where hundreds of millions of people live in poverty.

Yunus, an economist from Bangladesh, began providing loans to groups of poor village women to start small businesses in the 1970’s. He acted on two simple beliefs – that poor people are good investments, and that people can change their own lives. With a small loan, poor people could start a micro-enterprise, reinvesting their earnings and gradually lifting themselves out of poverty. Most poor people, however, could never get even a small loan from a bank because they lacked collateral assets. After several years of loaning his own money, Yunus founded the Grameen Bank, which has since issued small loans to more than six million borrowers, nearly all of them women. Since Grameen’s founding, the concept of micro credit has spread around the globe. In 2005, declared the “Year of Micro-credit” by the U.N., more than 100 million people received small loans from more than 3,100 institutions in 130 countries.

The growth of the microfinance movement has sparked an intense debate over the value of micro-credit schemes in ending poverty. Critics question the ability of micro-credit to make a difference in the lives of the poorest. Some point out that poverty is often the product structured inequalities, such as lack of access to markets and land, or services such as healthcare and education. Micro-credit schemes, they argue, can act as a safety net for those pushed to the margins of existence by these inequalities, but they will not help to transform the underlying structures, leaving millions in poverty.

Economic journalist Gina Neff points out that "after 8 years of borrowing, 55% of Grameen households still aren't able to meet their basic nutritional needs--so many women are using their loans to buy food rather than invest in business."

Although its overall impact will continue to be debated, it is clear that micro-credit has proven an important tool for women around the world struggling to cope with poverty. By awarding the Nobel Prize for Peace to the creators of this tool, the Nobel Committee draws attention to the links between poverty and conflict. Poverty is a destabilizing force, with the power to trigger or intensify conflict. When awarding the prize, the Committee stated that “Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty.”

The Committee’s statement echoes the words of U.N. Secretary-General Kofi Annan who has warned: “We now see, with chilling clarity, that a world where many millions of people endure…extreme misery will never be fully secure, even for its most privileged inhabitants.” The definition of lasting peace must be expanded beyond the mere cessation of armed conflicts between powerful nations, to include the access of all individuals to basic necessities.

The efforts of Muhammad Yunus and the Grameen Bank have changed the lives of millions of poor people for the better. However, no one tool, however powerful, can end poverty. Ending poverty requires a comprehensive strategy, with measurable targets, implemented at all levels, from local to international. The Millennium Development Goals provide a comprehensive plan for cutting global poverty in half by 2015 and we urge the U.S. to honor its commitment to achieving them.
 

Updated October 27, 2006