Tuesday, April 23, 2013

Muhammad Yunus

Muhammad Yunus

Muhammad Yunus’ pioneering efforts in regards to the burgeoning use of micro-loans in many parts of the world to help foster the economic vitality of the underprivileged had won him the Nobel Peace Prize.

Muhammad Yunus is known as the “Banker to the Poor” and founder of the Grameen Bank.  Yunus was born on June 28, 1940 in Bangladesh during the beginning of the Second World War.  .  He grew up on Boxirhat Road in Chittagong, the largest port in Bangladesh and a commercial city with a population of three million.  Bangladesh is a densely populated country with a total population of about 150 million people.  His family was relatively prosperous; they lived in a two story house with his father’s jewelry shop on the ground floor.

His family was Muslim by religion.  His mother exerted a powerful influence on the young Yunus; he was particularly influenced by her strong sense of compassion and concern for the poor.  According to Yunus, his mother dominated his early years.  She gave birth to fourteen children; five of them died.
Early in Yunus’ life, the subcontinent was freeing itself from British domination.  In 1947, the Pakistan movement for partition reached its peak.  The area that is now the sovereignty of Bangladesh was expected to be subsumed by Pakistan.  His parents were deeply committed to partition.  On August 14, 1947, the Indian subcontinent was granted independence.  This was a period of great turmoil and uncertainty.  In addition, when Yunus was nine, his mother was stricken with mental illness - a disease that ran in her family.    She suffered for some thirty-three years before her death. His father’s reaction to his wife’s chronic and debilitating illness was a model of love, graciousness and perseverance for all that time, and in 1982, his mother passed away.

As a young man, Yunus traveled to Canada, the U.S., the Philippines and Japan.  In 1957, he was a student in the Department of Economics at Dhaka University and received his BA in 1960 and MA in 1961.  Following his graduation, Yunus joined the Bureau of Economics at Dhaka University. Later he accepted a faculty position as a lecturer in economics in Chittagong College.  Using his education, he also set up a successful business; until, 1965 when he received a Fulbright scholarship and went to the University of Colorado at Boulder.  There he became a student of economics, and was deeply influenced by Professor Georgescu-Roegen, a Rumanian.  Yunus described his mentor in the following way, “He also taught me that things are never as complicated as they seem.  It is only our arrogance that prompts us to find unnecessarily complicated answers to simple problems.’”

During his stay in the United States, he was married.  At that time, Pakistan was unable to hold firmly onto West Pakistan (now Bangladesh) and used repressive methods to control the population.  This helped spawn a movement in his homeland to seek independence. As a consequence, the Pakistani army was ordered by the central government to brutally suppress the organizations responsible for the Bengali Declaration of Independence.  Yunus was committed to the independence of his homeland from continued Pakistani rule.  He became Secretary of the Bangladesh Citizen’s Committee and its chief spokesperson.  Finally, on December 16, 1971, Bangladesh won its war of independence – a conflict that resulted in the  catastrophic  loss of three million Bengali lives.  Ten million citizens fled the country during this time of upheaval.  Yunus felt duty-bound to return home and participate in the immense task of rebuilding his war-ravaged land.

He became head of the Economics Department at Chittagong University.  There he soon became disenchanted with traditional economics, for he felt that economic theory did not coincide with the needs of the majority of Bengalis living in dire poverty – a country where the illiteracy rate was seventy-five percent.  In categorizing his feelings about the role of education, he stated that, “A university must not be an island where academics reach out to higher and higher levels of knowledge without sharing any of these findings.  These economists spend all their talents detailing the processes of development and prosperity, but rarely reflect on the origin and development of poverty and hunger.   As a result, poverty continues.”  Furthermore he felt that, “Nothing in the economic theories I taught reflected the life around me.  How could I go on telling my students make-believe stories in the name of economics?  I wanted to become a fugitive from academic life.  I need to run away from these theories and from my textbooks and discover the real-life economics of a poor person’s existence.”

One of the historic factors that greatly influenced Yunus’ decision to encourage economic reform in his country was the famine that had become pervasive throughout Bangladesh.  He,  therefore, took it upon himself to visit poor villages and discover firsthand the nature of their living conditions and real causes for their poverty.
From this study, he came to realize that many Bengali households attempted to increase their economic standing by creating their own small businesses and provide products that are in local demand.  He was to discover that one of the main obstacles that faced these individuals was the common practice of usury, where unscrupulous lenders would lend money with such exorbitant interest rates that their clients could never free themselves from seemingly endless cycles of indebtedness.  The traditional banks offered no relief in this regard.

Yunus summarized his findings in this way - “This is the beginning for almost every Grameen borrower.  All her life she has been told that she is no good, that she brings only misery to her family, and that they cannot afford to pay her dowry.  Many times she hears her mother or her father tell her she should have been killed at birth, aborted or starved.  To her family, she has been another mouth to feed, another dowry to pay.  But today, for the first time in her life, an institution has trusted her with a great sum of money.  She promises that she will never let down the institution or herself.  She will struggle to make sure that every penny is paid back.”

These data inspired Yunus to organize an institution to lend directly to these industrious entrepreneurs.  What started with humble beginnings ended with the state-sanctioned Grameen Bank that has a presence all over the world, including Malaysia, the Philippines, South Africa and even the United States.  The Grameen Bank officially began operations in January of 1977.  The operating assumption of the Grameen Bank is that every borrower is honest.  Borrowers are required to adhere to a regular repayment schedule.  In addition, borrowers are encouraged to enter into groups with the idea that as a member of a group, they will have additional incentive to behave responsibly.  Membership in a group also affords each member additional support and encouragement.  As a result of implementing these practices, the bank suffers less than one percent of bad debt.  Prior to the creation of the Grameen Bank, less than one percent of borrowers were women in a society where women typically bear the brunt of the burden of poverty. 

On October 2, 1983, the Grameen Bank was recognized by the government as a separate bank that could also issue home loans.  Currently, seventy-five percent of the shares in the Grameen Bank are owned by the borrowers themselves.  As of 1999, 190 million dollars has built 560,000 houses with near perfect repayment.  In the 1980s, one hundred branches were added each year.  In 1985, a Grameen Branch was set up in the state of Arkansas during the governorship of Bill Clinton - it is called the Good Faith Fund.  Branches have also been set up in Oklahoma and Chicago, Illinois.  Today the Grameen Bank has about eight million members - some 40 million individuals counting family members - and has loaned about eight billion dollars to the poor in Bangladesh.  Grameen America is a growing organization in the U.S. that uses the group lending and savings models pioneered by Yunus.

As a result of his monumental efforts, Yunus was awarded the Nobel Prize for Peace in 2006.  The following is an excerpt taken from his acceptance speech -
“If we consider ourselves passengers on “Spaceship Earth,” we will find ourselves on a pilotless journey with no discernible route to follow.  If we can convince ourselves that we are actually the crew of this spaceship, and that we must reach a specific socioeconomic destination, then we will continue to approach that destination – even if we make mistakes or take detours along the way.”

In my mind, Yunus demonstrated by his actions the remarkable power of an idea.  His solution to the endemic problem of poverty that surrounded him in his native country of Bangladesh was a simple one, yet it has had profoundly beneficial consequences for many millions of individual lives and families.  In his mind, the primary goal of the Grameen Bank was and continues to be economic development.  Its obvious success is a testimonial to the validity of his thinking.  His brainchild has spread beyond the borders of Bangladesh and has found worldwide application.  What was originally conceived as a rather simple concept has grown into a viable approach to practically and successfully bring millions of people out of blinding poverty.  

Thursday, April 4, 2013

The Legacy of Dag Hammarskjold and the UN

The United Nations (UN) has been existence for over seventy years.  Its existence may be controversial for those who believe that it poses a threat to national sovereignty; however, it has played a critical role over its lifetime in providing an environment for dialog between nations in the midst of conflict and has on many occasions averted the possibility of unrestrained conflict.  One of the early architects of the UN was Dag Hammarskjold.  A brief description of his life and his contribution to the cause of world peace is described below.  In addition to his role as a global statesman, Hammarskjold was also a poet in his own rite.

The UN was created in 1941 by the Allied powers during World War II anticipating the end of the war with the goal of maintaining the peace after the hostilities had ended.  The one significant drawback regarding the makeup of this organization is the fact that it is essentially controlled by the powerful industrial nations through the Security Council that was originally composed of five members - the United States, the Soviet Union, China, France and England.

The UN is under the leadership of the Secretary General, who is voted in.  The first Secretary General was Trygve Lie, who remained in that position until 1952.  During his administration, many UN members had lost confidence in the international organization for a number of reasons.  The Security Council had become known for its inaction.  Furthermore, the Taiwanese government represented China on the Security Council after mainland China - People’s Republic of China (PRC) - had fallen to the Communists.  As a consequence, about one-quarter of the world’s population was not represented. In protest regarding this exclusion, representatives of the Soviet Union boycotted the UN from January to August 1950; it was their absence that allowed for the UN-sponsored military intervention in Korea.

At that time, Lie had supported the Security Council’s decision to resist by force the invasion of South Korea by military forces from North Korea - a conflict that was first called a “police action” but eventually came to be referred to as the Korean War.  The Soviet Union essentially ignored Lie after 1950 and right-wing elements of the United States were severely critical of his leadership.  As a consequence of the Korean War, Lie came under intense political pressure.  He ultimately resigned his position on November 10, 1952. 
At that time, Dag Hammarskjold was Minister of State in Sweden’s Foreign Office.  He was recommended for the post of Secretary General of the UN and was accepted by all with the exception of the Chinese.  Hammarskjold was truly surprised by the nomination; he never expected it.  After considerable personal deliberation, he accepted the nomination and on April 10, 1953, he was instated.

The following taken from a speech he made at John Hopkins University in 1955 sheds considerable light on his worldview and the principles that motivated him, “The dignity of man, as a justification of our faith in freedom, can be part of our living creed only if we revert to a view of life where maturity of mind counts for more than outward success and where happiness is no longer to be measured in quantitative terms.  Politics and diplomacy are no play of will and skill where results are independent of the character of those engaging in the game.”  He was a realist, but also was a man of strong ethics.  He was a believer in the power of the mind, especially when operating through reasoned judgment.  He deeply valued integrity and what he often referred to as “maturity of mind.”

To further illustrate the character of his thinking, I have included a number of his commentaries taken from his book entitled, Markings:

 “The more faithfully you listen to the voice within you, the better you will hear what is sounding outside.  And only he who listens can speak.  Is this the starting point of the road towards the union of your two dreams – to be allowed in clarity of mind to mirror life and in purity of heart to mold it?”

“A heart pulsating in harmony with the circulation of sap and flow of rivers A body with the rhythms of the earth in its movements?  No.  Instead: a mind, shut off from the oxygen of alert senses, that has wasted itself on “treasons, stratagems and spoils” – of importance only within four walls.  A tame animal – in whom the strength of the species has outspent itself, to no purpose.”

“Like the bee, we distill poison from the honey for our self-defense – what happens to the bee if it uses its sting is well known.”

“O how much self-discipline, nobility of soul, lofty sentiments, we can treat ourselves to, when we are well-off and everything we touch prospers – Cheap: scarcely better than believing success is the reward of virtue.”

“Only he deserves power who every day justifies it.”

“To preserve the silence within-amid all the noise.  To remain open and quiet, a moist humus in the fertile darkness where the rain falls and the grain ripens-no matter how many tramp across the parade ground in whirling dust under an arid sky.”

“The style of conduct which carries weight calls for stubbornness even in an act of concession: you have to be severe with yourself in order to have the right to be gentle to others.”

“Do not seek death.  Death will find you.  But seek the road which makes death a fulfillment.”

“Forgiveness breaks the chain of causality because he who “forgives” you---out of love---takes upon himself the consequences of what you have done.  Forgiveness, therefore, always entails a sacrifice.
“The price you must pay for your own liberation through another’s sacrifice is that you in turn must be willing to liberate in the same way, irrespective of the consequences to yourself.”

These comments offer, in my judgment, important insights into the character and persuasions of the man and inform us regarding the inner motivations that determined his actions.

Hammarskjold was born on July 29, 1905 in Jonkoping, Sweden.  His father, Hajmar Hammarskjold, was involved in Swedish politics; he served as a delegate to the negotiations that led to the dissolution of the Swedish union with Norway.  He was a severe man, fully entrenched in his principles.  His father ultimately became Prime Minister in 1914.  Over time, he became unpopular; his views were interpreted as essentially undemocratic and reactionary.  During the First World War he proclaimed Sweden’s neutrality.  In a joint note to both warring parties, Hajmar proposed that the Swedish government remain the guardian of international principles.  He was chosen as chairman of the League of Nations Committee for the Codification of International Law and delegate to the Disarmament Conference.  Hammarskjold felt that one of his father’s admirable qualities was that he believed in and actively sought justice.  His mother, Agnes, was described as having clarity of mind and a radically democratic view of her fellow humans.

Hammarskjold was obviously influenced by both his parents.  Given his upbringing, it is no surprise that he chose a life of public service.  Those who knew him found him to have a quick and astute mind, a sense of humor, boundless curiosity and to be highly disciplined.  These traits would serve him well as Secretary General of the UN.
At the time that Hammarskjold took over the Secretary General position at the UN, the international body was in disarray, especially in regards to its role in the Korean War in the midst of the Cold War.  He realized that the UN needed reorganization; he set about this task with remarkable energy.  The world community seemed to be pleased with his efforts and, more importantly, his results.

According to Brian Urquhart, author of Hammarskjold, “Hammarskjold saw as the primary function of the UN the day-to-day effort to control and moderate conflicts that were a threat to peace, through a system of mediation and conciliation developed on the basis of the sovereign equality of states.  This primary function went hand in hand with a long-term effort to attain wider social justice and equality both for individuals and, in the political, economic and social senses, for nations.  He believed that progress in this direction must be based on a growing respect for international law and on the emergence of a truly international civil service, free from all national pressure and influences and recognized as such by governments.”

He saw his role as Secretary General as a discreet, objective and relentless negotiator always acting with and through sovereign governments.  He visualized his role as an embodiment of the hopes of mankind and for peace and justice.  He felt that in this position, he should avoid pointing a finger of blame.  It is a position that only assumes any semblance of authority when the situation becomes so tenuous and dangerous that the UN becomes the last hope for a peaceful resolution.

During his tenure as Secretary General, Hammarskjold had to employ his talents and abilities on numerous occasions.  We will focus on one in particular regarding the issue of Palestine.  With the collapse of the Ottoman (Turkish) Empire during World War I, the colonial powers, especially Great Britain and France, filled the political vacuum left by the former empire.  The post war arrangements that were a direct result of this shift in power and influence created the environment for future upheavals, especially the Arab-Israeli conflict that persists even to this day.  When Hammarskjold arrived at the UN in 1953, an uneasy peace was maintained through armistice agreements and the Tripartite Declaration of France, Great Britain and the United States, signed in May 1950.  Its purpose was to maintain the status quo and prevent aggression by any governments in the region against their neighbors.  The inherent instability of the region came to a head in 1948 with the creation of the state of Israel.  There were many factors that contributed to the de-facto end of the Tripartite Declaration including the growth of Arab nationalism, the increased influence of the Soviet Union in the region and the decline of influence of the waning powers of Great Britain and France.  The failed Arab invasion of Palestine in 1948 exacerbated the underlying tensions.

To further exacerbate difficulties in the region, President Gamal Abdul Nasser of Egypt refused to allow ships to and from Israel to pass through the canal despite UN resolution issued in 1951 that called upon Egypt to allow all ships to pass through the canal.  In spite of his intransigence, Great Britain and France pulled their troops out of the canal.  The enmity between Israel and Egypt and other neighboring Arab states in the region quickly deteriorated.  Skirmishes and reprisals soon began to spiral out of control.  Israeli raids into Gaza and raids of Egyptian-trained Palestinian fedayeen became all too common place.  During this time, Hammarskjold made it quite clear that he would not intervene in any way; until, he was asked to do so.  It was not long before the situation became so grim that he was called upon to get the offending sides to negotiate with one another.  Despite the intense enmity and hatred, Hammarskjold managed to get Nasser and David Ben-Gurion of Israel to sit down with one another; this represented a significant first step in the negotiation process.  Eventually, all sides agreed upon a cease fire.  This was a truly amazing accomplishment.  In spite of this success, Hammarskjold was too much of a realist to believe the situation was resolved, for he knew only too well that he was but one man.  In fact, in just a few years the Suez Canal crisis would erupt, and, once again, he would be called upon to employ his remarkable skills.

Dag Hammarskjold had an illustrious career; until, his untimely death in a plane crash while trying to help bring peace to the troubled African Congo.  He was a person of great courage and inner strength, who believed strongly in the cause of peace and the rule of law.  He was driven by a strong sense of purpose, and an indefatigable willingness to serve.  He dedicated himself to a selfless life of service for what he understood to be the greater good.