The goal of the government’s demonetisation policy may be to flush out black money from the system, but the rot is far deeper, says Nobel laureate Prof. Muhammad Yunus. “Black money has already taken root, and we’re now doing a clean-up. It’s like an afterthought. It’s good that you’ve done that once, but are you going to repeat the process every six months? What about the system, the process? If you leave the doors open, water is bound to get in again,” he says.
The ‘process’ he refers to is the imbalance built into the economy, wherein wealth is concentrated in the hands of a few. “You cannot have a system where the bottom level is empty, but the top gets juicier. Such a system is not sustainable; it generates black money.”
Another flaw is that the financial system leaves out the ‘unbankable’. Most people live in villages and unless institutions address their needs and unleash their creative capacity, real change cannot take place, he says. The banking system has to serve the needs of the poorest person, and this is something he has been saying for the past four decades. Still, not much has changed on the ground.
When Prof. Yunus started Grameen Bank in Bangladesh in the 1970s, which provides finance to low-income individuals without collateral, he was clear it would not have branches in any city or town in Bangladesh. “We said people should not come to the bank; the bank should go to the people. We forced ourselves to stay in villages, and concentrated on the poorest people and the women. That’s the microcredit we talk about. But today, you have them everywhere, and some of them are imitating conventional banking. You abandon the poor because you say they are not sustainable, and you can’t make enough money. So you move on, or charge them very high interest rates.”
Social businesses can bridge the gap to a large extent. These are businesses that do not operate with the sole motive of profit, but are constantly thinking of solutions to issues faced by communities at the bottom end of the economic spectrum. Yunus Social Businesses, for instance, finances more than 500 young entrepreneurs in Bangladesh every month. “Today, we have about 10,000 young people in the villages of Bangladesh running businesses.”
Social businesses can address almost every issue, but to him, it’s the ‘three zeros’ that count: zero poverty, zero unemployment and zero net carbon emission. “When we achieve these, we can lay the foundation for a new civilisation. The old civilisation is a greed-based one that’s breeding everything we now talk about: black money and so on. So we undo that, and move into a human values-based civilisation.”
Ideally, by 2030, the world should have achieved zero proverty, zero unemployment by 2040, and zero net carbon emissions by 2050. Technology, the youth and social business are the forces that will make this happen.
Unemployment, particularly, is an “absurd concept”, and Prof. Yunus is unequivocally pro-entrepreneurship. “We created the concept of unemployment by creating the concept of employment. I tell young people in Bangladesh and elsewhere that we are not born to become job-seekers, we’re job creators. You make that happen through social businesses. If you’re forced to work for somebody else that is undignified.” Social businesses can foster the entrepreneurial spirit in people, as opposed to the “mercenary” mindset. “I create my own wealth, and am not just contributing to another’s. When I do that, I even know how to grow it in my context.”
Growing inequality worries him, not just because it excludes the poorest of the poor out of the mainstream, but because it is at the heart of global political and economic turmoil (Prof. Yunus was recently in the news for advising US President-elect Donald Trump to build ‘bridges, not walls’). “The concentration of wealth is a ticking time bomb,” he says, citing the US elections and Brexit as expressions of this discontent.
“You don’t trust other people, you build walls. People are saying their jobs are going to China or to Central Europe. Two countries have already shown us what could happen with this, which will be the next two?”
The future of microfinance, then, is linked to the future of the human race. To Prof. Yunus, it’s the big picture that counts.
I create my own wealth, and am not just contributing to another’s. When I do that, I even know how to grow it in my context
Prof. Muhammad Yunus
