Business Solutions to Poverty
Mar. 1, 2017
Nobel Peace Prize Laureate Muhammad Yunus says poverty is a ticking time bomb, and he recently visited Japan to explore new ways to help the poor.
Yunus won the Nobel Peace Prize in 2006 for his efforts to eradicate poverty. He was born in Bangladesh, and became an economics professor in the US.
In 1983, he returned to his home country and founded Grameen Bank. Known as "the bank for the poor," it pioneered the concept of microcredit. It allowed poor people to borrow small amounts of money without collateral, helping them become financially independent. The system is now used in over 180 countries.
But global poverty still exists. In fact, the gap between the rich and poor is growing, and social divisions are becoming more entrenched. How does Yunus see the state of the world today?
NHK Senior Commentator Aiko Doden spoke to Muhammad Yunus during his visit to Japan last week.
Doden: A recent Oxfam report indicates that the world’s 8 richest people have the same wealth as the poorest half of the global population. How do you assess the state of the world today?
Yunus: Isn’t it disgusting, to even say that 8 people have more wealth than the bottom 50 percent of the entire world population? This is the system, this is the mechanism which we created called capitalism. It pushes all the wealth to the top. It empties it at the bottom. So I was saying that this is not the sustainable world. And I keep saying, reminding people that this is a ticking time bomb, because you cannot sustain yourself in a situation like that, where all the wealth goes to one direction and suddenly it blows up, and the bottom becomes totally empty of it.
And you will have political problems. People will keep asking questions. You will have economic problems. Economy cannot be sustained because you have nothing and everything is blocked out out there. And you will have societal problems.
Doden: Yunus says that such frustrations are connected to events like Britain's decision to leave the European Union and Donald Trump's US presidential election victory.
Yunus: This is an expression of anger. People are frustrated and they express themselves, that "we don’t like this. We don’t like to have foreigners coming to our country and taking away our jobs." So they blame the foreigners. Actually, it is not the foreigners who are taking up their jobs. It is the direction in which all the wealth is going up to the top. And isolationism, you know, so distances from each other, distrustful with each other, and that will lead to a lot of dissatisfaction and confrontation.
Doden: That gives you more reasons why you have to keep addressing this poverty eradication to address the root causes of the world we have today.
Yunus: That’s right. It is a very fundamental issue. The poverty issue is a fundamental issue that we cannot just walk away from.
Lending money is just part of the story. Yunus is trying to create businesses that will solve social problems such as poverty. More than 4 billion people across the world earn less than $3,000 a year. This large segment of the population, with its potential purchasing power, could provide huge business opportunities.
The "social business" that Yunus advocates focuses on the problems these people face, such as malnutrition and environmental degradation. Companies engaged in social business use technology to address such issues. They gain profit, and these profits are reinvested. Unlike charity projects that depend on donations, the business creates sustainability, both in profit-making and problem-solving.
Yunus has several projects in Bangladesh. He founded a joint business with French dairy product maker Danone to sell fortified yoghurt at low prices. The scheme employs a network of women who take the yoghurt to local villages.
Yunus has also started an energy business to provide solar panels to regions without electricity. And he has partnered with a water management company to purify contaminated water and provide safe drinking water at an affordable cost.
In the medical field, he has opened an eye hospital to perform operations for cataracts, which are a common problem in Bangladesh. The hospital uses a unique system... people only pay if they can afford to, while those who can't are treated free of charge.
Now Yunus is looking to Japanese companies to use their technology to reduce poverty. He is particularly interested in the work Japanese food corporation Ajinomoto has been doing to tackle child malnutrition in Africa.
Ajinomoto has teamed up with a local company and a university in Ghana to develop and sell nutritional supplements. The main ingredient of the supplements is soy beans. Adding them to porridge gives children extra iron, protein and vitamins. Data show that the initiative has helped children gain weight and reduced cases of stunted growth.
"A good point is that the sales lady delivers the message on nutrition so that mothers can understand why nutrition is important, and they try to use it," says Yasuhiko Toride, senior advisor at Ajinomoto.
Yunus: What they are doing in Ghana is also -- it's an example. It is basically a social-business initiative. Food is one part of the story. Another part is that, I can put it in their table, all the table the food. But if they don’t know the use of it why is it important, then it is useless. So mothers, children, teachers, also learning, becoming involved in that, but this is very important for my child, because if I don’t give this additional nutrition, the child becomes malnourished, which means its growth will be stunted. He or she will not be growing as tall as he potentially could. He or she will also not be as intelligent as potentially he or she is.
Doden: Why do you think it is that some companies are becoming more aware, that it is part of their mission to come on board this global endeavor to eradicate poverty?
Yunus: It is because of 2 things. One, they are becoming more and more conscious by themselves. And the other is, the whole world is kind of looking at them with accusing eyes. What are you doing? Are you busy making money? Is that what you do? So they ask themselves. Is this what we are doing? Is it all about money-making? There is nothing else we have to do? So they are becoming more and more conscious about it, and looking for ways how to show their responsibility to the society in which way they can do it. Take a little bit of profit and give it to people. It has its limited objectives and limited success. But it is that the need is so much, so much bigger. So there are many other ways of trying to do that within the company, how they can do it.
If you look at the poverty issue, and you look at the wealth concentration issue, you can’t just squeeze your eyes shut and say, “Oh, I don’t see them.” You can’t do that because it is there, and it is a ticking time bomb, and we have to address that. And you cannot say that this is too complicated, too difficult a problem to solve. It may be difficult, but it is not unsolvable. It is a question of the human mind. If you pay attention to it, it will get solved.