The Nobel Peace Prize 2006

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Bangladesh's Muhammad Yunus, Grameen Bank Win Nobel Peace Prize

By Bunny Nooryani

Oct. 13 (Bloomberg) -- Bangladesh's Muhammad Yunus and the Grameen Bank won this year's Nobel Peace Prize for working to advance economic and social development among the poor, the Nobel Committee said today.

Yunus, born in 1940, founded the Grameen Bank which provides credit to the poor in rural Bangladesh without any collateral. The so-called micro-credit system has spread to several countries around the world.

``Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty,'' said Ole Danbolt Mjoes, director of the Nobel Committee, which picks the winner. ``Micro-credit is one such means. Development from below also serves to advance democracy and human rights.''

The peace prize, worth 10 million kronor ($1.4 million), was created in the will of Swedish industrialist Alfred Nobel more than a century ago. Past winners include Mother Theresa, Doctors Without Borders and the 14th Dalai Lama. It was first handed out in 1901.

The five-member Nobel committee keeps nominations secret. Of the 191 nominees for this year's award, 168 were for individuals and the rest for organizations.

The prize should be awarded to ``the person who shall have done the most or the best work for fraternity between the nations, for the abolition or reduction of standing armies and for the holding and promotion of peace,'' Nobel's will says.

Last year's prize went to the International Atomic Energy Agency and its Egyptian director general, Mohamed ElBaradei, 64, for their work to stop the military use of nuclear energy.

The award is formally awarded at a ceremony in Oslo on Dec. 10, the anniversary of Nobel's death in 1896. Nobel also set up prizes for achievements in physics, medicine, chemistry and literature, which are handed out by the Stockholm-based Nobel Foundation.

An economics award was established in memory of Nobel by Sweden's central bank in 1969.

To contact the reporter on this story: Bunny Nooryani in Oslo at bnooryani@bloomberg.net

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Introduction
Muhammad Yunus (Bengali: মুহাম্মদ ইউনুস Muhammod Iunus) (born June 28, 1940), is a Bangladeshi banker and economist. He is the developer and founder of the concept of microcredit, the extension of small loans to entrepreneurs too poor to qualify for traditional bank loans. Yunus is also the founder of Grameen Bank. In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, for their efforts to create economic and social development from below. Yunus himself has received several other international honors, including the World Food Prize. He is the author of Banker to the Poor and a founding board member of Grameen Foundation.

Childhood and family
Yunus was born in 1940 in the village of Bathua, in Hathazari, Chittagong. His father's name is Hazi Dula Mia Shoudagar, and mother's name is Sufia Khatun. His early childhood years were spent in the village. In 1947, his family moved to the city of Chittagong, where his father had a jewellery business.

Yunus is married to Afroji Yunus, a professor of physics at Jahangirnagar University. He is the father of two daughters: Dina Yunus and Monica Yunus. His brothers are also active in academia: his brother Muhammad Ibrahim is a professor of physics at Dhaka University; his younger brother Muhammad Jahangir is a popular television presenter.

Education and early career
Yunus studied at his village school in the early years. When his family moved to Chittagong, he enrolled in the Lamabazar Primary School. Later, he studied at Chittagong Collegiate School and passed the matriculation examination, in which he secured the 16th position among 39,000 students in East Pakistan. During his school years, he was active in the Boy Scouts, and travelled to West Pakistan and India in 1952. In 1955, he attended the World Scouts Jamboree in Canada as part of the Pakistan contingent. On the way back, he travelled through Europe and Asia by road. Next, Yunus enrolled into Chittagong College where he was active in cultural activies and got awards for acting in dramas.

In 1957, he enrolled in the department of economics at Dhaka University and completed his BA in 1960 and MA in 1961. Following his graduation, Yunus joined Chittagong College as a lecturer in economics. He obtained his Ph.D. in economics from Vanderbilt University in the United States in 1969 after getting a Fulbright scholarship. From 1969 to 1972, Yunus was an assistant professor of economics at Middle Tennessee State University before moving back to Bangladesh, where he joined Chittagong University as an economics professor.

Yunus first got involved in fighting poverty during a 1974 famine in Bangladesh. He discovered that very small loans could make a disproportionate difference to a poor person. His first loan consisted of US$27 from his own pocket, which he lent to women in the village of Jobra — near Chittagong University — who made bamboo furniture. They had to take out usurious loans in order to buy bamboo. They then sold these items to the moneylenders to repay them. With a net profit of 5 Bangladeshi taka (.02 USD), the women were unable to support their families. However, traditional banks were not interested in making tiny loans at more reasonable interest rates to poor people, who were considered repayment risks.

During this time, he established a rural economic programme as a research project. In 1974, he developed a Tebhaga Khamar (three share farm) which the government adopted as the Packaged Input Programme. In order to make the project more effective, Yunus and his associates proposed another project called 'Gram Sarkar' (the village government). The government adopted it in 1980, but the succeeding regime later lifted it away.

Yunus won the Nobel Peace Prize jointly with his Grameen Bank for "for their work in social and democratic development" in 2006. He is the first Bangladeshi to win the prize.

Founding the Grameen Bank
In 1976, Yunus founded the Grameen Bank (Grameen means "of rural area", "of village") to make loans to poor Bangladeshis. The Grameen Bank has issued more than US$ 5.1 billion to 5.3 million borrowers. To ensure repayment, the bank uses a system of "solidarity groups". These small informal groups apply together for loans and its members act as co-guarantors of repayment and support one another's efforts at economic self-advancement. As it has grown, the Grameen Bank has also developed other systems of alternate credit that serve the poor. In addition to microcredit, it offers housing loans as well as financing for fisheries and irrigation projects, venture capital, textiles, and other activities, along with other banking services such as savings.

The success of the Grameen model has inspired similar efforts throughout the developing world and even in industrialized nations, including the United States. The Grameen model of micro financing has been emulated in 23 countries. Many, but not all, microcredit projects also retain its emphasis on lending specifically to women. More than 96% of Grameen loans have gone to women, who suffer disproportionately from poverty and who are more likely than men to devote their earnings to their families.

Nobel prize
Muhammad Yunus was awarded the 2006 Nobel Peace Prize, along with Grameen Bank, for "their efforts to create economic and social development from below."

The announcement read:

“ The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.”

The 65-year-old economist said he would use part of his share of the $1.4 million award to create a company to make low-cost, high-nutrition food for the poor. The rest would go toward setting up an eye hospital for the poor in Bangladesh, he said. The food company, to be known as Social Business Enterprise, will sell food for a nominal price.

Other Grameen Sectors
Grameen Phone – Pioneer of Telecommunication
The Grameen Phone telecommunication project has evolved to become Bangladesh's biggest private phone company. It has more than nine million subscribers.

Village Phone
The Village Phone (পল্লি ফোন polli fon) project is another brainchild of Dr. Yunus that aims to bring phone connectivity to the rural population of Bangladesh, and at the same time give entrepreneural opportunities to rural women. Village Phone works by the basic idea of providing small amount loans to rural women to buy cellular phones to set up "public call centers" at their homes. Income generated by the call centers is used to pay off the loans.

Grameen Star Education
This was a project where students could take courses on currently needed sectors; they could also use this as a MLM (multi level marketing) source. Grameen took this step to prevent foreign MLMs from rushing into Bangladesh.

Grameen Check
For the moral of self-dependence, Dr. Yunus started a trend to wear simple local clothes and opened a small section for clothing. He also always wears Grameen Check. Now, it is one of the most popular trend among all classes of people of Bangladesh, especially in the capital of Dhaka. There are dozens of Grameen-based showrooms all over the country.

Awards

1. 1978 — President's Award, Bangladesh
2. 1984 — Ramon Magsaysay Award, Philippines
3. 1985 — Bangladesh Bank Award, Bangladesh
4. 1987 — Shwadhinota Dibosh Puroshkar (Independence Day Award), Bangladesh
5. 1989 — Aga Khan Award for Architecture, Switzerland
6. 1993 — CARE Humanitarian Award
7. 1994 — Winner of the World Food Prize
8. 1996 — Winner of the UNESCO Simón Bolívar Prize
9. 1997 — Receives Help for SelfHelp Award of Strømme Foundation , Norway
10. 1998 — Receives Prince of Asturias Award
11. 1998 — Winner of the Sydney Peace Prize
12. 2004 — Winner of The Economist newspaper's Prize for social and economic innovation.
13. 2006 — Mother Teresa Award instituted by the Mother Teresa International and Millenium Award Committee (MTIMAC), Kolkata, India.
14. 2006 — 8th Seoul Peace Prize
15. 2006 — Nobel Peace Prize, shared with Grameen Bank
16. And 47 others, for a total of 62.

Additionally, Prof. Yunus has been awarded 27 honorary degrees (all but one a doctorate), and 15 special awards. The Grameen Bank website includes a List of Awards Received by Professor Muhammad Yunus.

Former U.S. president Bill Clinton was a vocal advocate for the awarding of the Nobel Prize to Muhammed Yunus. He expressed this in Rolling Stone magazine as well as in his autobiography My Life. In a speech given at University of California, Berkeley in 2002, President Clinton described Dr. Yunus as "a man who long ago should have won the Nobel Prize and] I’ll keep saying that until they finally give it to him."

Yunus was judged one among the ten most famous living Bengali personalities in a in a poll organized by Muktadhara New York.