Transcript of Introduction by Steve Forbes, for Nobel Peace Prize Winner Muhammad Yunus, Recipient of the Forbes 400 Lifetime Achievement Award for Social Entrepreneurship
June 5, 2013, During the Forbes 400 Summit on Philanthropy
The United Nations, New York City
Thank you, I am Steve Forbes. And I think we all will agree this has been a stirring day. Tonight we’ve got several things in store. We are giving out two awards tonight. And I think we’d also agree that what happened today is simply the beginning – a catalyst, not a culmination.
And I think that what one of our award winners tonight, Muhammad Yunus said, that you begin things with a small step and that leads to big things. And that’s one reason why we focused on Liberia, a country that was shattered, but anyone who was at lunch today was inspired and can see that when people come together and want to make positive things happen, positive things will happen.
And I think we also can take to heart what Bono said during his session about commerce, about free enterprise being a huge poverty reducer. It enables people, as Lincoln put it, to improve their lot in life. But, as we all know, even vibrant free markets don’t always operate at the pace and have the reach that we would like. So clearly, government can’t do it alone, NGOs can’t do it alone, free enterprise can’t do it alone, although it can do a lot. And philanthropy, private philanthropy, can only do so much. But you bring these tools together and amazing things will happen.
And the nice thing about the group here today, and as we indicated earlier, you are accustomed to overcoming obstacles, you’re accustomed to setbacks and learning from setbacks, you’re accustomed to risk-taking, and making things ultimately happen, and not letting setbacks be the final word.
As I said, we have two awards tonight, one is the Forbes 400 Award for Social Entrepreneurship Lifetime Achievement Award, and there is no mystery as who is going to get that tonight. About 120 years ago a man in California saw that banks were not serving immigrants and merchant seamen. He was in San Francisco. He was on the board at a local bank and said “Why don’t we serve these unserved communities?” and they said, “Are you crazy? You don’t know who these people are. It can’t be done” So he quit the board of the bank and started his own bank. It started as the Bank of Italy and became the Bank of America.
A.P. Giannini, doing things that no other banker would do. Realizing, as our recipient puts it, if you understand people and not just look at credit numbers, you can make amazing things happen from the most unlikely constituencies.
Our award winner tonight, is a trained economist. As a matter of fact, after attending a university in his home country of Bangladesh, he got his doctorate at Vanderbilt. So here he was in Bangladesh, and in 1974, shortly after Bangladesh achieved independence from Pakistan, the country was hit by a devastating famine, and 1 million people perished. Here’s what our recipient said. He said “It gave me a jolt. I couldn’t live with teaching elegant economic theories, and walking around and seeing people dying. I wanted to learn from people, not textbooks.” So the idea of the Grameen Bank was born from that horrible happening. And he met initial resistance with the idea that you could lend to the poor, and couldn’t get permission from the authorities to go ahead. In fact the only way it could be done, was that he had to start it as a research project at the local university and in 1982 Bangladesh had a coup, and it turns out that his close friend, with whom he had discussed this project, became finance minister. And so the idea began to really become a reality, but initially the government took 60% of the bank. The wonderful thing Professor Yunus did was to put in the creation of the bank that depositors, borrowers, would get shares as the bank grew. And since the government was too stingy to put in equity, today the government’s share is down to 3%. The borrowers and depositors own the rest. The poorest in Bangladesh now own this bank, and the government is left with 3%, which I’ll get to in a moment. The government hasn’t stopped.
And he had a great insight, as we all saw today and we know from before: you don’t give the money away, but if you put it in a form of a loan and have a circle of friends who, in effect, guarantee it, it goes for a productive purpose instead of just sheer consumption. And if people undertake certain pledges, such as to try to fight this dowry tradition that is so devastating in that part of the world, extraordinary things can happen. We all know the adage about teach a man to fish, not just feed him fish, and you feed him for a lifetime. As our recipient pointed out, that’s all well and good, that is, as long as he has a net and a boat. But if he doesn’t have a boat and a net, then the knowledge isn’t going to do him much good.
So today the Grameen Bank has 8.5 million borrowers and depositors. Poor women, almost all; 2,600 branches in over 80,000 villages, managing a billion and a half dollars, which is an amazing, amazing thing. Credit worthy, don’t worry about that. People worthy, that should be the test. By the way, that’s not an original insight; J.P. Morgan, the original J.P. Morgan, said he made loans based on character, not balance sheets.
So in terms of moving ahead, the small steps work. And it’s had a profound impact in Bangladesh. Yes, a key thing is, one of the key things is that country has experienced great growth. Despite recent problems, Bangladesh has been a growth story, and the recipient tonight has not received enough credit, they haven’t connected the dots that what he’s done was a critical catalyst of what has been happening in Bangladesh.
But it also did something else that I think has worldwide application, and that is in many countries women, most women, are treated as a financial burden to men, to their husbands, to their fathers. They’re seen as a drain. He realized that if you make them producers, let them learn from experience, then the whole world changes, and the amazing thing is, they start to realize that the traditions that have held them down are just traditions, and not a permanent feature of the universe.
So our recipient believes in problem solving, and a good example, just have to give you this one example, is yogurt. He made an agreement with Dannon yogurt to sell yogurt, but yogurt comes in plastic containers. And Muhammad said, “No, that’s not permissible. It’s got to be biodegradable.” Dannon said, “What are you talking about? We do this worldwide! Do you want to do it or not?” He said, “Figure out another way to do it.” And by golly, they did. Not only is it degradable, but it’s actually edible. And you can eat it in Bangladesh. Amazing!
And here’s what he said, “Companies have creative powers, but unless you ask, you never get an answer. You push, and amazing things happen.” Opposition obviously came in the wake of this happening. Amazingly, development experts at the beginning were highly skeptical. They pooh-poohed the idea. Then of course, religious fanatics resisted it: you’re empowering women. Then, sadly, the Bangladesh government has forced our recipient out of the bank that he created. Shocking, forced his resignation. Unbelievable. 97% owned by women, 3% owned by the government; extraordinary catalyst for positive change that enabled that country to grow. The old cliché “no good deed goes unpunished” is certainly true here. Amazing. As our recipient put it: “a self-governing entity that has empowered poor women and earned global admiration will now be converted into a poorly managed and corrupt government bank.” So if you see anyone from the Bangladesh government, give ‘em a piece of your mind, “What in the world do you think you’re doing?”
But, he’s not a man who is held down. He’s active in 50 other companies based on the same principle as the Grameen Bank, ranging from agriculture to telecommunications. This guy could run General Electric or Berkshire Hathaway.
So in closing, let me give you two of his quotes. He said, “In order to solve global problems, you have to solve problems of individuals.” He’s also an optimist. Despite what has happened, all that he’s been through, the ups and downs, he said when he got the Nobel Prize, he said, “One day, our grandchildren will go to museums to see what poverty was like.” Remarkable, remarkable man.
So I would like to ask Professor Yunus to come up and receive our l award for a man who has done so much, and is an inspiration of combining the best in human nature.
