One Idea Can Help Resolve Some of the World’s Most Pressing Problems

by tybmmjourno

By Shruti Parmar

1.4 billion people in our world live on less than $1 a day. Poverty and hunger are violations of human rights and the root causes of a vicious cycle of problems in our society. MDG 1 Eradicate extreme poverty and hunger seeks to resolve these pressing issues through the following sub-targets:

  • Target 1A: Halve the proportion of people living on less than $1 a day
    • Proportion of population below $1 per day (PPP values)
    • Poverty gap ratio [incidence x depth of poverty]
    • Share of poorest quintile in national consumption
  • Target 1B: Achieve Decent Employment for Women, Men, and Young People
    • GDP Growth per Employed Person
    • Employment Rate
    • Proportion of employed population below $1 per day (PPP values)
    • Proportion of family-based workers in employed population
  • Target 1C: Halve the proportion of people who suffer from hunger
    • Prevalence of underweight children under five years of age
    • Proportion of population below minimum level of dietary energy consumption

Ever since its founding, Bangladesh has been known as one of the world’s poorest countries. However, Bangladesh is today well on track to achieving the targets of Goal 1. It has poverty coming down to 40 percent in 2005. Also, the average annual rate of poverty reduction till 2005 has been 1.34 percent against the required 1.23 percent to meet the 2015 target. The poverty gap ratio has also decreased dramatically to 9.0.

The statistics are significantly the result of a story that gave birth to a revolutionary idea. In 1974, Muhammad Yunus was teaching economics at a Chittagong University in southern Bangladesh, when the country experienced a terrible famine in which thousands starved to death. “We tried to ignore it,” he says. “But then skeleton-like people began showing up in the capital, Dhaka. Soon the trickle became a flood. Hungry people were everywhere. Often they sat so still that one could not be sure whether they were alive or dead. They all looked alike: men, women, and children. Old people looked like children, and children looked like old people.” The thrill he had once experienced studying economics and teaching his students elegant economic theories that could supposedly cure societal problems soon left him entirely. As the famine worsened he began to dread his own lectures. “Nothing in the economic theories I taught reflected the life around me. How could I go on telling my students make believe stories in the name of economics? I needed to run away from these theories and from my textbooks and discover the real-life economics of a poor person’s existence.”  Yunus went to the nearby village of Jobra where he learned the economic realities of the poor. Yunus wanted to help, and he cooked up several plans working with his students. He found that one of his many ideas was more successful than the rest: offering people tiny loans for self-employment. Grameen Bank was born and an economic revolution had begun.

Professor Muhammad Yunus established the Grameen Bank in Bangladesh in 1983, fuelled by the belief that credit is a fundamental human right. His objective was to help poor people escape from poverty by providing loans on terms suitable to them and by teaching them a few sound financial principles so they could help themselves. From Dr. Yunus’ personal loan of small amounts of money to destitute basket weavers in Bangladesh in the mid-70s, the Grameen Bank has advanced to the forefront of a burgeoning world movement toward eradicating poverty through micro lending. Replicas of the Grameen Bank model operate in more than 100 countries worldwide.

In this way, microcredit allows families to work to end their own poverty – with dignity.

At a macro level, it is because 70 percent of the world’s poor are women. Micro finance ensured another MDG is also silently being fulfilled- that of MDG 3 Promote gender equality and empower women. As Muhammad Yunus says, “all along the way, women have longer vision, want to change their lives much more intensively because if you have a scarcity in the family she misses out. So everything comes in the raw deal for her. So, given a chance she works very hard to make a change to improve her life. And by training she is the most efficient manager of scarce resources. Because with the little resource she has, she has to stretch it as much as she can to look after the children, look after the family and everything else.Unlike men – men want to enjoy right away. Whatever he got, whatever tiny bit of thing he got he doesn’t care for much what’s coming up.”