Newsletter No. 466

466 • 4.11.2015 3 T he government’s recent figures on poverty in Hong Kong indicate close to a million people are struggling under the poverty line, which means one out of every seven Hong Kongers live in poverty. Is poverty impossible to eliminate? Or have we been using the wrong approach? On 14 October, Prof. Muhammad Yunus , Bengali economist, also known as ‘Banker to the Poor’, was invited to CUHK by the University Lecture on Civility to share his ideas on tackling poverty with a thousand-strong audience on the topic ‘Small Loans for a Big Future’. Abandoning Economic Theory Professor Yunus obtained a doctoral degree in Economics in the US in 1969. He then returned to Bangladesh and joined Chittagong University as head of the Economics department in 1972. In 1974, famine swept through Bangladesh. ‘When famine was raging outside, and I was teaching those elegant economic theories, I asked myself, “Am I teaching something about people? Or just cooking up something to please myself?” I found that I was not useful to anybody. So I went out of the university to find something I could do to feel useful to at least one person.’ He visited the village of Jobra near the university, where he found lots of women engaged in small businesses. Because they were not ‘bankable’ hence not eligible for loan services provided by conventional banks, they could only make a living at the mercy of loan sharks. He only lent them US$27 of his own money and helped 42 families. That gave him the first taste of the importance of microcredit to the poor. Later he became a guarantor for people applying for bank loans and they made repayments on time. However, with more money loaned, banks started to reject his applications. He had an idea: Why don’t I run a bank that serves the poor? Eventually, Grameen Bank was founded. ‘Grameen’ means ‘village’ in Bengali. Grameen Bank: Doing the Opposite Founded in 1983, Grameen Bank provides microcredit to the poor without requiring guarantees. It is now one of the biggest commercial banks in Bangladesh. Grameen’s model has been adopted in close to 180 projects in over 100 countries. Grameen America is a successful case that has projects in 11 cities in the US, benefiting over 50,000 women living in poverty. As of January 2015, total loans of Grameen amount to US$16.5 billion, and repayment rate is over 98%. In 2006, Professor Yunus and Grameen Bank were jointly awarded the Nobel Peace Prize for their ‘efforts through microcredit to create economic and social development from below’. ‘There is no sophisticated rule, principal, guideline to run my programme. I just look at what the conventional banks are doing, and then I just do the opposite. And it works beautifully for me.’ Professor Yunus said, ‘They go to the rich, I go to the poor; They go to the men, I go to the women, They need guarantee, I trust everyone. They open in city centres, I go to the villages.’ Professor Yunus noted that the existing social system designed for the rich will not do the poor any good. So he didn’t take the old road to overcome poverty like asking government to allocate more resources to the poor or offering them charity. He believes these traditional methods fail to create income for tackling problems in the long term. They also fail to recognize the problem for what it is and come up with a solution. It leads to people distancing themselves from the issue by saying that if the poor worked harder, they wouldn't be poor. What he does is change the system and help the poor to unlock their potential and fight for their lives. ‘To me, the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil base you provided was inadequate.’ Changing the Soil of Economic Activities Professor Yunus is convinced that financial systems could benefit the poor, but we have to change the rules of the game. Grameen Bank is not just a lending institution; it has its own unique operating model. For instance, it offers loans to women living below the poverty line—over 97% of borrowers are women; every borrower is required to form a solidarity group of five people, who must not be closely related. It helps the poor to develop their social networks; besides, there is a list of agreements that borrowers have to agree to follow, such as sending children to school, and keeping the environment clean. The agreements significantly modify people’s traditional way of living, and go far beyond the spheres of regulations of conventional banks. Besides honouring the poor’s right to financial services, Professor Yunus hopes to change society through the development of social enterprises. He pointed out that too many ‘middlemen’ are making a profit in every stage of the process between goods production to sales. The reason is that in capitalist societies, people are motivated by self- interest. They are ‘one-dimensional money-making robots’. ‘Business schools only teach people how to make money for companies rather than solve social problems.’ He set up dozens of social enterprises, for instance Grameen formed a venture with a food company to produce yogurt that provides rural children many key nutrients; built solar home systems in Bangladesh; promoted mobile communications in Bangladesh to improve the economy. Professor Yunus doesn’t own any shares in these social enterprises. To him, ‘making other people happy is super- happiness’. Professor Yunus believes that young people today have mastered the power of technology to change the world; they should think about how to make good use of the tools in their hands. He bluntly dismissed the idea of working for others as artificial and not far from slavery. It has to stop. Young people should be job creators not job seekers. ‘Finding a job is an old-fashioned idea…People are born to be entrepreneurs. It is a shame if education makes us forget who we were.’ Professor Yunus hopes we will achieve zero poverty, zero unemployment, and zero carbon emission soon. It is only then that we can turn our current human civilization rooted in selfishness to one based on what it truly means to be human. One day our children may have to go to museums to see how we once allowed so many fellow human beings to live in poverty. Professor Yunus is planning to introduce Grameen Bank to Hong Kong and has made initial contact with dozens of local social enterprises. Will his 30-plus years of experience in poverty eradication bring enlightenment to this most capitalist of world cities? 穆罕默德 • 尤努斯教授 Prof. Muhammad Yunus 圖片由博群大講堂提供 Photo courtesy of University Lecture on Civility 尤努斯教授（中）參觀博群大講堂舉辦的貧窮專題展覽 Professor Yunus (centre) visits the exhibition on global and local poverty hosted by the University Lecture on Civility