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Last Updated: 10/27/2006
Poverty: Leaving it to the Petty-Bourgeoisie
Simon Stander

Poverty: Leaving it to the Petty-Bourgeoisie

In the same year as Orhan Pamuk, also a Muslim, to be awarded the Nobel for literature, Muhammad Yunus has been awarded the Nobel Peace Prize for his work in attempting to alleviate poverty, especially in his home country of Bangla-Desh. He shares the large sum of money which the prize offers with the Grameen Bank which he founded. So a person and his institutional brain child benefit in equal parts. International reaction has been especially favourable. The citation notes that

Loans to poor people without any financial security had appeared to be an impossible idea.” 

Many of us in our more impoverished days may have had the experience of trying to borrow cash from a bank without collateral reinforcing the fact that you have to assets to borrow money, thus leading us to scratch our heads and note that the rich can borrow ever larger sums but the poor have no hope of getting an unsecured loan except from a loan shark who would only impoverish them further if not actually break a limb or two.

Perhaps the most impossible ideas are in fact the simplest. Giving loans of a few dollars to poor people to become small capitalists hardly seems revolutionary. Nor is it necessarily a big part of the answer to the alleviation let alone the eradication of poverty.

Sensibly, the Nobel citation recognizes that micro-credit is only part of the solution.

“Yunus' long-term vision is to eliminate poverty in the world. That vision cannot be realised by means of micro-credit alone.”

It is true that, on paper, Grameen now reaches out across the globe:

“In Bangladesh today, Grameen has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. On any working day Grameen collects an average of $1.5 million in weekly installments. Of the borrowers, 94% are women and over 98% of the loans are paid back, a recovery rate higher than any other banking system. Grameen methods are applied in projects in 58 countries, including the US, Canada, France, The Netherlands and Norway.” (

Thus, while there are many, mostly women, who have much to thank the Grameen Bank and Professor Yunus for, the deep set and extensive problems of development are as great as they ever were. Issues to do with Security and Human Rights have taken precedence over the issue of development itself. Economists and politicians, who once talked easily about economic growth as the answer to poverty, are no longer so sure and haven’t been for a long time. In a recent book by William Easterly (The Elusive Quest for Growth, MIT Press, 2002) it is even suggested that the vast proportion of funds to poor countries has been wasted and misapplied and in some cases has done more harm than good. Among the worst offenders are governments, he argues. It is easy to see what is wrong but more difficult to find answers. As for Economists, Easterly, who is one, have found that “the problem of making poor countries rich was much more difficult than we thought.”

Muhammad Yunus, professor of Economics at Chittagong University, has found one way of helping, but is the Nobel Prize a feather in the cap of the free market capitalists? Can lending a fistful of unsecured dollars really offer an alternative to the rampaging power of the transnationals? Can the petty bourgeoisie solve poverty when the big capitalists can’t? Will next year’s Nobel go to Bono and his Product Red?

Simon Stander is editor-in-chief of the Peace and Conflict Monitor