Noble Nobel

Good for the Nobel Committee, for a change. This year's Peace Prize goes to Muhammad Yunus and the Grameen Bank of Bangladesh, and for once it is thoroughly merited.

Pee-Jay O'Rourke visited the Grameen Bank during his travels to Bangladesh and wrote about it in the chapter on overpopulation in his 1994 book All The Trouble In The World. His main point was that this kind of microeconomic organization was far more beneficial to the Bangladeshi in the street than such international boondoggles as the World Bank, although at the end he cautioned it was only a drop in the bucket:

I went to the Grameen Bank [ ]. The Grameen Bank was started by somebody who actually did make loans from his own personal funds, Muhammad Yunus, head of the economics department at Chittagong University. Professor Yunus was so appalled by the economic situation in Bangladesh in the 1970s that he decided to quit just professing economics and start getting involved in the economy. He loaned a total of $30 to forty-two impoverished village artisans so they could buy the materials for their crafts. Now the Grameen Bank has 910 branches with more than a million borrowers. The average loan size is $75, and the maximum loan is $180, unless you want to build a house, in which case you can get $300.

Grameen, though it loans money only to the poorest Bangladeshis, is a going concern. It charges 16 percent interest and has a default rate of only 8 percent. Grameen borrowers are formed into five member groups to mutually guarantee loans. Only two members of each group can have loans outstanding at the same time. Several groups form a "centre," and each centre is visited by a Grameen representative once a week. Ninety-two percent of the borrowers are women because the Grameen people believe an increase in women's income directly benefits households. Professor Yunus said, "A man has a different set of priorities, which do not give the family top position," by which I think he means cigarettes and floozies.

Grameen urges the women not only to be economically self-supporting but to follow a set of tenets called the "Sixteen Decisions." These include such resolutions as "We want to change our life," "We want to grow trees," and "We shall not take any dowry when we're getting our sons married and we shall not give any dowry when we are marrying off our daughters." The Grameen Bank also does such things as sell vegetable seedlings to its customers to improve their diets. Although vegetables are easy to grow in Bangladesh (as everything is), people aren't accustomed to eating them and vitamin-deficiency diseases are rife.

The Grameen Bank has run into opposition. Leftists claim it teaches capitalism to the Bangladeshi poor. The village mullahs hold that it is sacrilege for women to fool with money. And local traditionalists are shocked at brides without dowries and probably at vegetables. Grameen is a little piece of a society trying to reconstruct itself. In the office of Khandaker Mozammel, the bank's number two man, I noticed the bookshelf contained Rousseau's Social Contract, Milton and Rose Friedman's Free To Choose, Selected Works of Chairman Mao, and Beyond Love. No stone, however dense or mossy, is being left unturned in the process of this reconstruction.

The Grameen Bank is obviously a better sort of thing for Bangladesh than massive airdrops of soft money from the World Bank or having the Peace Corps send flocks of idealistic comparative lit majors to teach people who have been farming for three thousand years how to farm. But it is tempting to expect too much from a Grameen Bank. Grameen only has thirty-six million dollars in assets. And the product of Grameen-financed enterprise is, when all's been said, that million-stitch bedspread it took me two hours to buy. Better that than no product, but bedspreads are not what Germany and Japan based their postwar economic miracles upon.

Which is why they call it "microeconomics," of course. Baby steps. All the same, congrats to the Grameen Bank and congrats to the Nobel Committee for recognizing its worthiness.