Q. What is more dangerous than a celebrity with a cause?
Thank god then that the the 2006 Nobel Peace Prize was awarded to Muhammad Yunus and his Grameen Bank – someone that actually deserved it, not someone that was simply a savvy marketeer.
This is an excellent choice, and the Nobel Committee must be congratulated for its imagination in making the link between poverty and peace. For prosperity is a necessary, if not sufficient, condition for peace. As the Committee said:
Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty.
Even as it validates the importance of inclusive development, the decision also trashes Geldof’s simplistic and patronizing idea that more money by countries that otherwise participate in a twisted international system, will solve global poverty.
Yunus’ work shows that just the opposite is true. That solutions to poverty are complex, at best, and must fit the situation. Even microfinance, hailed globally as a solution that works, works differently in different regions and even fails in certain communities.
There are other problems with microfinance. And as with all ideas that become holy grail in the west, the presumed success of microfinance has a downside. It prevents a true evaluation of the impact of this model. It also prevents us from questioning if the problem is a lack of finance, or something more fundamental. Most of all, it is ironic, unfortunate, and dangerous that ‘civil society’ proponents of microfinance take its apparent success to validate a simplistic solution to a complex problem.
In the aftermath of the decision, Yunus is being hailed as ‘the banker of the poor’. There is truth to that characterization, but his contribution is simpler, and more fundamental than banking.
He has shown that the lack of formal laws is not an impediment to market transactions. Instead, he has proven that existing informal social rules can very effectively fill in for such formal laws in poor communities.
The implications of his work are therefore much wider than banking. The lack of laws has prevented market players from engaging with poor communities. However, by expanding what constitutes ‘laws’ and ‘rules’ in market transactions, and elevating the idea to the international stage, he allowed the idea to be adopted by anyone with a modicum of imagination.