Norwegian Nobel Committee Chairpersons Speech

Speech given by The Chairman of the Norwegian Nobel Committee Ole Danbolt Mjøs (Oslo, December 10, 2006)

Your Majesties, Your Royal Highnesses, Laureates, Excellencies, Ladies and Gentlemen,

"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 can not 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."

Those were the words in which the Nobel Peace Prize award was announced on the 13th of October this year. Today the time has come for well-deserved celebration! Muhammad Yunus and Grameen Bank: congratulations on the Nobel Peace Prize! And congratulations to you, Mosammat Taslima Begum, who will receive the prize on behalf of Grameen Bank.

Not all the journalists covering the announcement of the award at the Nobel Institute knew who Yunus and Grameen Bank were. Some thought Grameen Bank was a person. Let that be the reporters' problem. The many who did know of both held that they ought to have received the Peace Prize long ago. In 2002, Bill Clinton put it this way: "Dr. Yunus is a man who long ago should have won the Nobel Prize and I'll keep saying that until they finally give it to him." Now Clinton will no longer need to remind us.

This year's award has been well received, internationally, in Norway, and not least in Bangladesh. It almost defies comprehension that when, as chairman of the Nobel Committee, I walk up to a microphone at the Nobel Institute in Oslo and announce that this year's Peace Prize is going to Yunus and Grameen Bank, politicians and papers in large parts of the world begin to comment on, and to a large extent to applaud, the Norwegian Nobel Committee's choice. And what is even harder to believe: there is an outbreak of joyful demonstrations in Bangladesh. For several days one could almost have described the country as closed because of happiness. Many said that this was the greatest thing to have happened to the country since independence in 1971.
 
In recent weeks, growing numbers of people have become acquainted with the outlines of Yunus's exciting story. Trained in economics in the United States, he returned to Bangladesh in 1972 and took a chair in economics at the University of Chittagong. In 1974 he underwent a personal crisis during the country's famine. It shook him to see such poverty. And he asked himself, "What is the point of all these splendid economic theories when people around me are dying of hunger?" As early as in 1976, he hit on the idea of opening a bank for poor people. He lent 27 dollars out of his own pocket to 42 craftsmen in a little village in Bangladesh, telling them that they could pay the money back when they could afford to. In the weeks that followed, he gave the matter a great deal of thought, and decided that there would have to be an institutional solution.

The result was Grameen Bank, which is present today in the vast majority of Bangladesh's thousands of villages, and which since its formal opening in 1983 has lent almost six billion dollars. Today the bank has almost seven million borrowers. Grameen Bank lends 800 million dollars per year, in loans averaging just over one hundred dollars. The bank is self-financing and makes a profit. The repayment percentage is very high. Muhammad Yunus says, "Lend the poor money in amounts which suit them, teach them a few sound financial principles, and they manage on their own".

By means of this year's Peace Prize award, the Norwegian Nobel Committee wishes to focus attention on dialogue with the Muslim world, on the women's perspective, and on the fight against poverty.

First, we hope that this Peace Prize will represent a possible approach to the Muslim part of the world. Since the 11th of September 2001, we have seen a widespread tendency to demonize Islam. It is an important task for the Nobel Committee to try to narrow the gap between the West and Islam. The Peace Prize to Yunus and Grameen Bank is also support for the Muslim country Bangladesh and for the Muslim environments in the world that are working for dialogue and collaboration. All too often we speak one-sidedly about how much the Muslim part of the world has to learn from the West. Where micro-credit is concerned, the opposite is true: the West has learned from Yunus, from Bangladesh, and from the Muslim part of the world.

Secondly, this year's Peace Prize places women centre-stage. Over 95 per cent of the borrowers are women, and their liberation is a major concern for Yunus and Grameen Bank. The emphasis on women may have been the most important factor in the success of their work. Women were not alone to begin with, but their proportion rose rapidly. In Yunus's words, "For women to be granted the loan has a definite effect on the family. There is no need to do more research on that today. Children benefit automatically, with better clothes and food. We can see the situation changing". Men often spend the money on themselves; women spend it on the family. The bank's practice has meant a social revolution in Bangladesh. One of the borrowers, Mazeda Begum, has put it like this: "My parents gave me the birth, but Grameen Bank gave me a life". In today's terminology, micro-credit is indeed "female empowerment".

Micro-credit has proved itself to be a liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity on earth contributes on an equal footing with the male.

Thirdly, and most importantly, we have the fight against poverty and for social and economic development. Muhammad Yunus has shown himself to be a leader who has managed to turn visions into practical action for the benefit of millions of people, not only in Bangladesh but also in many other countries. There are now micro-credit programs in nearly one hundred countries all over the world, including Norway. Loans to poor people, most often women, without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.

Numbers soon multiply and swell. But behind each number there is an individual human being. Every single person on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that the poor can work to bring about their own development. In Yunus's words, "Micro-credit is a well-tried and well-founded method that can bring financial services to the poorest of the poor. Micro-credit promotes entrepreneurship, and puts each individual poor person, especially women, in the driving-seat in their own lives". Even beggars have become borrowers in the bank. Yunus believes firmly that alms destroy the initiative and creativity of poor people.

As he wanders about in his Bengalese clothes, Yunus is sometimes referred to as a modern Gandhi. He is called the banker of the poorest. And Grameen Bank, which means the village bank, is the world's biggest bank for poor people. Through their deposits, poor people own 94 per cent of the bank. The remaining 6 per cent belong to the Government of Bangladesh. The bank is based on a different philosophy from that of normal banks. Yunus says micro-credit is more about people than about money. It is a question of trusting people. Credit means to trust, to give someone "credit".

The poor people organize themselves into groups, often of five women. It is the group that is granted the loan and is responsible for repayment. The group meets regularly to sharpen each other's perceptions of borrowing, work, repayment and saving. The members undertake to work for food production, pure drinking water, hygiene, health, family planning, economy, discipline, community and motivation in the group and in their families. The groups form networks with other groups. At the grass-roots level the groups thus help to build up communities. Groups of women who assume responsibility have also recently been points of departure for vaccination and health programs.

The struggle against poverty in the world is an existential struggle for survival. Today roughly half the world's people live on less than two dollars a day, and more than one billion live on less than one dollar a day, which is extreme poverty. This means that the majority of people on earth are poor. And the majority of them are women and children. This may be the greatest challenge confronting the world over the next few decades. Every country and nation in the world must contribute. It is shameful that far over half the people in the world live under such conditions. The struggle against poverty is work for peace of the first order.

The Secretary-General of the United Nations, Nobel Peace Prize Laureate Kofi Annan, has said that "Today borders do not go between nations, but between the powerful and the powerless, the free and the enslaved, the privileged and the subservient". The United Nations' number one Millennium Development Goal is to halve global poverty by 2015. Achieving that goal will require global mobilization. Will you join in, will your country join in, and will national leaders join in to meet this challenge? There is a long way to go, but we must travel it together. The aim must be peace with justice in the world. And justice means a life in dignity. The Norwegian Nobel Committee underlines that "lasting peace can not be achieved unless large population groups find ways in which to break out of poverty". Peace with justice must be built from below, by means to which Muhammad Yunus and Grameen Bank have contributed.

The Norwegian Nobel Committee is often asked which concept of peace it applies. The question has come up this year, too. Although the response to this year's award to Muhammad Yunus and Grameen Bank has been generally favourable, some have asked what micro-credit has to do with peace. They deserve an answer.

The point of departure is always Alfred Nobel's will. But the fact is that the three criteria for the peace prize which Nobel mentions in his will, work for "fraternity between nations", for "the abolition or reduction of standing armies", and for "the holding of peace congresses", only provide limited guidance. That leaves it to a large extent up to the Norwegian Nobel Committee itself to interpret and concretize the concept of peace. Ever since 1901, this has been a matter for dispute, if not so much within the Committee as in the public domain. When the very first prize was awarded, to Henri Dunant and Frédéric Passy, nearly everyone accepted the pacifist Passy. To some, however, Dunant presented a problem. Was his work relevant to peace? Certainly the Red Cross did excellent work once war had broken out, but what did they do to prevent war?

The earliest prizes went to peace activists of various kinds, to statesmen and, as we have seen, to humanitarian organizations and persons. Then the Committee began awarding the Peace Prize to campaigners for human rights. Again there were prompt counter-arguments. What did human rights have to do with peace? Did not the emphasis on such rights on the contrary tend to arouse conflict? In the 1980s, however, a growing number of political scientists began to take an interest in Immanuel Kant's analyses of the connection between democracy and peace. In due course, more and more of them came to the conclusion that democracies were peaceful, at least in relation to other democracies. This has now become one of the most "robust" findings in modern political science. It is gratifying to see science now giving its almost unanimous support to a view which the Norwegian Nobel Committee has held for decades.

In 2004, the Nobel Committee maintained that there was a connection between a depleted environment and war and conflict. This year the theme is the struggle against poverty. What has that got to do with peace? This is not something the Norwegian Nobel Committee only hit on this year. Many previous prizes have gone to the struggle against poverty. The distinction between humanitarian work and the struggle against poverty is of course not clear, as the three prizes to the Red Cross and the awards to the High Commissioner for Refugees, Médécins sans Frontières, Mother Teresa etc. all show. In addition, the Nobel Committee has awarded the Peace Prize to the founder of the UN Food and Agriculture Organization (FAO), John Boyd Orr, and to the man behind the green revolution in agriculture, Norman Borlaug. So in principle this year's Peace Prize is less of a novelty than many appear to believe, even granting that micro-credit as a tool for overcoming poverty is completely new in the context of the Peace Prize.

Sound common sense is not to be despised. Most people would probably agree that the fact that wealthy Europe has been at peace in recent decades, while there have been many conflicts in poverty-stricken Africa, must have something to do with living conditions. The causal connections are complicated; everything can rarely if ever be attributed to a single factor. We would nevertheless intuitively believe that there must be a connection between poverty and conflict. But we do not have to rely solely on intuition. In the summary of research on this subject in Human Security Report 2005, we read that "Indeed, one of the most striking findings to emerge from conflict research is that most wars take place in poor countries, and that as per capita income increases, the risk of war declines". This is not to say that poor people are necessarily more violent than the more prosperous. Central government resources are also important. The more prosperous a country is, the more resources it has with which to resolve the problems that can give rise to conflict.

There is not just one way out of poverty. There are many. This year, however, the Norwegian Nobel Committee wants to draw attention especially to micro-credit. This instrument has produced good results in Bangladesh. Over the past few decades the country has recorded considerable economic growth. Some of that growth is certainly due to the operations of Grameen Bank and other institutions in the micro-credit field. It will be important to increase the use of this instrument.

In the book Banker to the poor. The story of the Grameen Bank, Yunus asks whether it is really possible to imagine a world without poverty. His own answer is as follows: "We have created a slavery-free world, a polio-free world, an apartheid-free world. Creating a poverty-free world would be greater than all these accomplishments while at the same time reinforcing them. This would be a world that we could all be proud to live in".

Around year 750 the Chinese poet Tu Fu wrote, in Peter Bilton's translation:

Swarming cities are smithies for swords
Better forge a ploughshare, forge a harrow
Where there now are tears and sand
There would be silk and corn
The widow would be a farmer's wife at her silk loom The soldier a farmer behind his ox and plough
Our silent people a choir in a song
For two voices, singing of silk and corn.

Today the Norwegian Nobel Committee wishes to express its admiration for the work Muhammad Yunus and Grameen Bank have done for thousands upon thousands of ordinary people in Bangladesh and in many other countries. We hope the Peace Prize will be a source of inspiration in the continuing work for a world without poverty. That is not a goal we shall reach in the next few decades. But we are on the way. Today we congratulate and celebrate the two of you, Muhammad Yunus and Grameen Bank. Bangla: Apnader Shobaikay Ushno Obhhindon: Warmest congratulations to you all! Tomorrow we shall hurry on together towards the goal of a world without poverty.

The Nobel Peace Prize Lecture

Nobel Lecture, Oslo, December 10, 2006.

Your Majesties, Your Royal Highnesses, Honorable Members of the Norwegian Nobel Committee, Excellencies, Ladies and Gentlemen,

Grameen Bank and I are deeply honoured to receive this most prestigious of awards. We are thrilled and overwhelmed by this honour. Since the Nobel Peace Prize was announced, I have received endless messages from around the world, but what moves me most are the calls I get almost daily, from the borrowers of Grameen Bank in remote Bangladeshi villages, who just want to say how proud they are to have received this recognition.

Nine elected representatives of the 7 million borrowers-cum-owners of Grameen Bank have accompanied me all the way to Oslo to receive the prize. I express thanks on their behalf to the Norwegian Nobel Committee for choosing Grameen Bank for this year's Nobel Peace Prize. By giving their institution the most prestigious prize in the world, you give them unparalleled honour. Thanks to your prize, nine proud women from the villages of Bangladesh are at the ceremony today as Nobel laureates, giving an altogether new meaning to the Nobel Peace Prize.

All borrowers of Grameen Bank are celebrating this day as the greatest day of their lives. They are gathering around the nearest television set in their villages all over Bangladesh , along with other villagers, to watch the proceedings of this ceremony.

This years' prize gives highest honour and dignity to the hundreds of millions of women all around the world who struggle every day to make a living and bring hope for a better life for their children. This is a historic moment for them.

Poverty is a Threat to Peace

Ladies and Gentlemen:

By giving us this prize, the Norwegian Nobel Committee has given important support to the proposition that peace is inextricably linked to poverty. Poverty is a threat to peace.

World's income distribution gives a very telling story. Ninety four percent of the world income goes to 40 percent of the population while sixty percent of people live on only 6 per cent of world income. Half of the world population lives on two dollars a day. Over one billion people live on less than a dollar a day. This is no formula for peace.

The new millennium began with a great global dream. World leaders gathered at the United Nations in 2000 and adopted, among others, a historic goal to reduce poverty by half by 2015. Never in human history had such a bold goal been adopted by the entire world in one voice, one that specified time and size. But then came September 11 and the Iraq war, and suddenly the world became derailed from the pursuit of this dream, with the attention of world leaders shifting from the war on poverty to the war on terrorism. Till now over $ 530 billion has been spent on the war in Iraq by the USA alone.

I believe terrorism cannot be won over by military action. Terrorism must be condemned in the strongest language. We must stand solidly against it, and find all the means to end it. We must address the root causes of terrorism to end it for all time to come. I believe that putting resources into improving the lives of the poor people is a better strategy than spending it on guns.

Poverty is Denial of All Human Rights

Peace should be understood in a human way - in a broad social, political and economic way. Peace is threatened by unjust economic, social and political order, absence of democracy, environmental degradation and absence of human rights.

Poverty is the absence of all human rights. The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives.

The creation of opportunities for the majority of people - the poor - is at the heart of the work that we have dedicated ourselves to during the past 30 years.

Grameen Bank

I became involved in the poverty issue not as a policymaker or a researcher. I became involved because poverty was all around me, and I could not turn away from it. In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly, I felt the emptiness of those theories in the face of crushing hunger and poverty. I wanted to do something immediate to help people around me, even if it was just one human being, to get through another day with a little more ease. That brought me face to face with poor people's struggle to find the tiniest amounts of money to support their efforts to eke out a living. I was shocked to discover a woman in the village, borrowing less than a dollar from the money-lender, on the condition that he would have the exclusive right to buy all she produces at the price he decides. This, to me, was a way of recruiting slave labor.

I decided to make a list of the victims of this money-lending "business" in the village next door to our campus.

When my list was done, it had the names of 42 victims who borrowed a total amount of US $27. I offered US $27 from my own pocket to get these victims out of the clutches of those money-lenders. The excitement that was created among the people by this small action got me further involved in it. If I could make so many people so happy with such a tiny amount of money, why not do more of it?

That is what I have been trying to do ever since. The first thing I did was to try to persuade the bank located in the campus to lend money to the poor. But that did not work. The bank said that the poor were not creditworthy. After all my efforts, over several months, failed I offered to become a guarantor for the loans to the poor. I was stunned by the result. The poor paid back their loans, on time, every time! But still I kept confronting difficulties in expanding the program through the existing banks. That was when I decided to create a separate bank for the poor, and in 1983, I finally succeeded in doing that. I named it Grameen Bank or Village bank.

Today, Grameen Bank gives loans to nearly 7.0 million poor people, 97 per cent of whom are women, in 73,000 villages in Bangladesh. Grameen Bank gives collateral-free income generating, housing, student and micro-enterprise loans to the poor families and offers a host of attractive savings, pension funds and insurance products for its members. Since it introduced them in 1984, housing loans have been used to construct 640,000 houses. The legal ownership of these houses belongs to the women themselves. We focused on women because we found giving loans to women always brought more benefits to the family.

In a cumulative way the bank has given out loans totaling about US $6.0 billion. The repayment rate is 99%. Grameen Bank routinely makes profit. Financially, it is self-reliant and has not taken donor money since 1995. Deposits and own resources of Grameen Bank today amount to 143 per cent of all outstanding loans. According to Grameen Bank's internal survey, 58 per cent of our borrowers have crossed the poverty line.

Grameen Bank was born as a tiny homegrown project run with the help of several of my students, all local girls and boys. Three of these students are still with me in Grameen Bank, after all these years, as its topmost executives. They are here today to receive this honour you give us.

This idea, which began in Jobra, a small village in Bangladesh, has spread around the world and there are now Grameen type programs in almost every country.

Second Generation

It is 30 years now since we began. We keep looking at the children of our borrowers to see what has been the impact of our work on their lives. The women who are our borrowers always gave topmost priority to the children. One of the Sixteen Decisions developed and followed by them was to send children to school. Grameen Bank encouraged them, and before long all the children were going to school. Many of these children made it to the top of their class. We wanted to celebrate that, so we introduced scholarships for talented students. Grameen Bank now gives 30,000 scholarships every year.

Many of the children went on to higher education to become doctors, engineers, college teachers and other professionals. We introduced student loans to make it easy for Grameen students to complete higher education. Now some of them have PhD's. There are 13,000 students on student loans. Over 7,000 students are now added to this number annually.

We are creating a completely new generation that will be well equipped to take their families way out of the reach of poverty. We want to make a break in the historical continuation of poverty.

Beggars Can Turn to Business

In Bangladesh 80 percent of the poor families have already been reached with microcredit. We are hoping that by 2010, 100 per cent of the poor families will be reached.

Three years ago we started an exclusive programme focusing on the beggars. None of Grameen Bank's rules apply to them. Loans are interest-free; they can pay whatever amount they wish, whenever they wish. We gave them the idea to carry small merchandise such as snacks, toys or household items, when they went from house to house for begging. The idea worked. There are now 85,000 beggars in the program. About 5,000 of them have already stopped begging completely. Typical loan to a beggar is $12.

We encourage and support every conceivable intervention to help the poor fight out of poverty. We always advocate microcredit in addition to all other interventions, arguing that microcredit makes those interventions work better.

Information Technology for the Poor

Information and communication technology (ICT) is quickly changing the world, creating distanceless, borderless world of instantaneous communications. Increasingly, it is becoming less and less costly. I saw an opportunity for the poor people to change their lives if this technology could be brought to them to meet their needs.

As a first step to bring ICT to the poor we created a mobile phone company, Grameen Phone. We gave loans from Grameen Bank to the poor women to buy mobile phones to sell phone services in the villages. We saw the synergy between microcredit and ICT.

The phone business was a success and became a coveted enterprise for Grameen borrowers. Telephone-ladies quickly learned and innovated the ropes of the telephone business, and it has become the quickest way to get out of poverty and to earn social respectability. Today there are nearly 300,000 telephone ladies providing telephone service in all the villages of Bangladesh. Grameen Phone has more than 10 million subscribers, and is the largest mobile phone company in the country. Although the number of telephone-ladies is only a small fraction of the total number of subscribers, they generate 19 per cent of the revenue of the company. Out of the nine board members who are attending this grand ceremony today 4 are telephone-ladies.

Grameen Phone is a joint-venture company owned by Telenor of Norway and Grameen Telecom of Bangladesh. Telenor owns 62 per cent share of the company, Grameen Telecom owns 38 per cent. Our vision was to ultimately convert this company into a social business by giving majority ownership to the poor women of Grameen Bank. We are working towards that goal. Someday Grameen Phone will become another example of a big enterprise owned by the poor.

Free Market Economy

Capitalism centers on the free market. It is claimed that the freer the market, the better is the result of capitalism in solving the questions of what, how, and for whom. It is also claimed that the individual search for personal gains brings collective optimal result.

I am in favor of strengthening the freedom of the market. At the same time, I am very unhappy about the conceptual restrictions imposed on the players in the market. This originates from the assumption that entrepreneurs are one-dimensional human beings, who are dedicated to one mission in their business lives - to maximize profit. This interpretation of capitalism insulates the entrepreneurs from all political, emotional, social, spiritual, environmental dimensions of their lives. This was done perhaps as a reasonable simplification, but it stripped away the very essentials of human life.

Human beings are a wonderful creation embodied with limitless human qualities and capabilities. Our theoretical constructs should make room for the blossoming of those qualities, not assume them away.

Many of the world's problems exist because of this restriction on the players of free-market. The world has not resolved the problem of crushing poverty that half of its population suffers. Healthcare remains out of the reach of the majority of the world population. The country with the richest and freest market fails to provide healthcare for one-fifth of its population.

We have remained so impressed by the success of the free-market that we never dared to express any doubt about our basic assumption. To make it worse, we worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualized in the theory, to allow smooth functioning of free market mechanism.

By defining "entrepreneur" in a broader way we can change the character of capitalism radically, and solve many of the unresolved social and economic problems within the scope of the free market. Let us suppose an entrepreneur, instead of having a single source of motivation (such as, maximizing profit), now has two sources of motivation, which are mutually exclusive, but equally compelling - a) maximization of profit and b) doing good to people and the world.

Each type of motivation will lead to a separate kind of business. Let us call the first type of business a profit-maximizing business, and the second type of business as social business.

Social business will be a new kind of business introduced in the market place with the objective of making a difference in the world. Investors in the social business could get back their investment, but will not take any dividend from the company. Profit would be ploughed back into the company to expand its outreach and improve the quality of its product or service. A social business will be a non-loss, non-dividend company.

Once social business is recognized in law, many existing companies will come forward to create social businesses in addition to their foundation activities. Many activists from the non-profit sector will also find this an attractive option. Unlike the non-profit sector where one needs to collect donations to keep activities going, a social business will be self-sustaining and create surplus for expansion since it is a non-loss enterprise. Social business will go into a new type of capital market of its own, to raise capital.

Young people all around the world, particularly in rich countries, will find the concept of social business very appealing since it will give them a challenge to make a difference by using their creative talent. Many young people today feel frustrated because they cannot see any worthy challenge, which excites them, within the present capitalist world. Socialism gave them a dream to fight for. Young people dream about creating a perfect world of their own.

Almost all social and economic problems of the world will be addressed through social businesses. The challenge is to innovate business models and apply them to produce desired social results cost-effectively and efficiently. Healthcare for the poor, financial services for the poor, information technology for the poor, education and training for the poor, marketing for the poor, renewable energy - these are all exciting areas for social businesses.

Social business is important because it addresses very vital concerns of mankind. It can change the lives of the bottom 60 per cent of world population and help them to get out of poverty.

Grameen's Social Business

Even profit maximizing companies can be designed as social businesses by giving full or majority ownership to the poor. This constitutes a second type of social business. Grameen Bank falls under this category of social business.

The poor could get the shares of these companies as gifts by donors, or they could buy the shares with their own money. The borrowers with their own money buy Grameen Bank shares, which cannot be transferred to non-borrowers. A committed professional team does the day-to-day running of the bank.

Bilateral and multi-lateral donors could easily create this type of social business. When a donor gives a loan or a grant to build a bridge in the recipient country, it could create a "bridge company" owned by the local poor. A committed management company could be given the responsibility of running the company. Profit of the company will go to the local poor as dividend, and towards building more bridges. Many infrastructure projects, like roads, highways, airports, seaports, utility companies could all be built in this manner.

Grameen has created two social businesses of the first type. One is a yogurt factory, to produce fortified yogurt to bring nutrition to malnourished children, in a joint venture with Danone. It will continue to expand until all malnourished children of Bangladesh are reached with this yogurt. Another is a chain of eye-care hospitals. Each hospital will undertake 10,000 cataract surgeries per year at differentiated prices to the rich and the poor.

Social Stock Market

To connect investors with social businesses, we need to create social stock market where only the shares of social businesses will be traded. An investor will come to this stock-exchange with a clear intention of finding a social business, which has a mission of his liking. Anyone who wants to make money will go to the existing stock-market.

To enable a social stock-exchange to perform properly, we will need to create rating agencies, standardization of terminology, definitions, impact measurement tools, reporting formats, and new financial publications, such as, The Social Wall Street Journal. Business schools will offer courses and business management degrees on social businesses to train young managers how to manage social business enterprises in the most efficient manner, and, most of all, to inspire them to become social business entrepreneurs themselves.

Role of Social Businesses in Globalization

I support globalization and believe it can bring more benefits to the poor than its alternative. But it must be the right kind of globalization. To me, globalization is like a hundred-lane highway criss-crossing the world. If it is a free-for-all highway, its lanes will be taken over by the giant trucks from powerful economies. Bangladeshi rickshaw will be thrown off the highway. In order to have a win-win globalization we must have traffic rules, traffic police, and traffic authority for this global highway. Rule of "strongest takes it all" must be replaced by rules that ensure that the poorest have a place and piece of the action, without being elbowed out by the strong. Globalization must not become financial imperialism.

Powerful multi-national social businesses can be created to retain the benefit of globalization for the poor people and poor countries. Social businesses will either bring ownership to the poor people, or keep the profit within the poor countries, since taking dividends will not be their objective. Direct foreign investment by foreign social businesses will be exciting news for recipient countries. Building strong economies in the poor countries by protecting their national interest from plundering companies will be a major area of interest for the social businesses.

We Create What We Want

We get what we want, or what we don't refuse. We accept the fact that we will always have poor people around us, and that poverty is part of human destiny. This is precisely why we continue to have poor people around us. If we firmly believe that poverty is unacceptable to us, and that it should not belong to a civilized society, we would have built appropriate institutions and policies to create a poverty-free world.

We wanted to go to the moon, so we went there. We achieve what we want to achieve. If we are not achieving something, it is because we have not put our minds to it. We create what we want.

What we want and how we get to it depends on our mindsets. It is extremely difficult to change mindsets once they are formed. We create the world in accordance with our mindset. We need to invent ways to change our perspective continually and reconfigure our mindset quickly as new knowledge emerges. We can reconfigure our world if we can reconfigure our mindset.

We Can Put Poverty in the Museums

I believe that we can create a poverty-free world because poverty is not created by poor people. It has been created and sustained by the economic and social system that we have designed for ourselves; the institutions and concepts that make up that system; the policies that we pursue.

Poverty is created because we built our theoretical framework on assumptions which under-estimates human capacity, by designing concepts, which are too narrow (such as concept of business, credit- worthiness, entrepreneurship, employment) or developing institutions, which remain half-done (such as financial institutions, where poor are left out). Poverty is caused by the failure at the conceptual level, rather than any lack of capability on the part of people.

I firmly believe that we can create a poverty-free world if we collectively believe in it. In a poverty-free world, the only place you would be able to see poverty is in the poverty museums. When school children take a tour of the poverty museums, they would be horrified to see the misery and indignity that some human beings had to go through. They would blame their forefathers for tolerating this inhuman condition, which existed for so long, for so many people.

A human being is born into this world fully equipped not only to take care of him or herself, but also to contribute to enlarging the well being of the world as a whole. Some get the chance to explore their potential to some degree, but many others never get any opportunity, during their lifetime, to unwrap the wonderful gift they were born with. They die unexplored and the world remains deprived of their creativity, and their contribution.

Grameen has given me an unshakeable faith in the creativity of human beings. This has led me to believe that human beings are not born to suffer the misery of hunger and poverty.

To me poor people are like bonsai trees. When you plant the best seed of the tallest tree in a flower-pot, you get a replica of the tallest tree, only inches tall. There is nothing wrong with the seed you planted, only the soil-base that is too inadequate. Poor people are bonsai people. There is nothing wrong in their seeds. Simply, society never gave them the base to grow on. All it needs to get the poor people out of poverty for us to create an enabling environment for them. Once the poor can unleash their energy and creativity, poverty will disappear very quickly.

Let us join hands to give every human being a fair chance to unleash their energy and creativity.

Ladies and Gentlemen,

Let me conclude by expressing my deep gratitude to the Norwegian Nobel Committee for recognizing that poor people, and especially poor women, have both the potential and the right to live a decent life, and that microcredit helps to unleash that potential.

I believe this honor that you give us will inspire many more bold initiatives around the world to make a historical breakthrough in ending global poverty.

Thank you very much.

Citation

The Nobel Peace Prize for 2006

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 can not 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 services to advance democracy and human rights.

Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.

Every single individual on earth has both the potential and the right to live a decent life. Across cultures and civilizations, Yunus and Grameen Bank have shown that even the poorest of the poor can work to bring about their own development.

Micro-credit has proved to be an important liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity participates on an equal footing with the male.

Yunus' long-term vision is to eliminate poverty in the world. That vision can not be realized by means of micro-credit alone. But Muhammand Yunus and Grameen Bank have shown that, in the continuing efforts to achieve it, micro-credit must play a major role.