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UNIT – 4Muhammad Yunus: An Economics for Peace – Farida Khan Q1) Write a short essay of about 200 words on the story ‘Muhammad Yunus : An Economics for Peace’.A1) The Yunus-Grameen story is really unique. It begins with Muhammad Yunus's return to Bangladesh after completing his doctorate in economics and then teaching at Middle Tennessee State University in the United States. Yunus had been guided in this path by Nicholas Georgescu Roegen, a unique thinker who created "evolutionary economics" and influenced Yunus in ways that would help him develop the ideas behind Grameen. Georgescu-Roegen made Yunus understand that without the human side, "economics is just as hard and dry as stone."Yunus returned in 1972 to the country and began teaching in Chittagong University. During the famine of 1974, he was very troubled by the disunion between academic economics and the reality of people dying from hunger. He found it difficult to teach the elegant economic models.At this time, he came upon Sufia Khatun, a local woman from the village of Jobra, who was weaving and selling cane stools. She had to borrow from the local moneylender to purchase raw materials and made a profit of a penny on each stool. Yunus decided to eradicate the monopoly power of lenders and increase her income. He gathered his students to witness a true lesson in economic development, as he lent money to Sufia and forty-one others for their business projects.Yunus poetically described what followed:"When she finally receives the twenty-five dollars, she is trembling. The money burns her fingers. Tears roll down her face. She has never seen so much money in her life. She never imagined it in her hands. She carries the bills as she would a delicate bird or a rabbit, until someone advises her to put the money away in a safe place lest it be stolen."This led to the establishment of an innovative group-lending system where interest-free loans were given to group members who were collectively responsible for repayment. The Grameen Bank was formally founded in 1976 and is owned by its borrowers. The success of the organization in strict banking terms was remarkable. Grameen's initial repayment rates were at 97%, as compared to the most conservative of the large global banks. The formation of groups to borrow Grameen funds became a way to empower women. Being able to borrow and have their own enterprises for income, led to greater agency among women - giving them far more power and more education for their children. At the same time, it resulted in objections and resistance from their spouses and family members, and religious leaders.Apart from promoting financial and individual empowerment, The Grameen Bank had a deliberate intention to raise social consciousness. At every meeting, women addressed problems related to health and sanitation, repeal of dowry, and various other environmental and health measures. Grameen has helped build a relationship of trust among the rural women and the bankers. Grameen is an instance of economics confronting power. The success of Grameen was replicated in rural Arkansas when Bill Clinton was governor. The Arkansas Good Faith Fund model was further copied by South Shore Bank and the Small Business Administration in the inner-city areas of Chicago. Microcredit eliminates poverty through entrepreneurship and asset-building. However, they say that microcredit does not reach the poor people, charges an excessively high interest rate, does not empower women because of their male relatives, and the microfinance services provided by city-based bankers eliminate the possibility of any genuine political mobilisation in the countryside. Grameen has upgraded itself by providing housing loans, information technology to rural women entrepreneurs through mobile telephones, introducing pension schemes, and reviving the production and marketing of handloom through the introduction of the "Grameen check".Muhammad Yunus's expertise in finding and applying the right business ideas is what makes him a remarkable development economist. His love for the village and feel for the rural poor lives shines through in his economic experiments.As banks tighten their credit in a privatised world, increasing poverty, misery, and crime in the process, microcredit, NGOs, and the peacemakers will have to do their job, to make sure that the violence of starvation and poverty is not perpetuated by global governments who have now all agreed to live by the uniform code of neo-liberalism.
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