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The Profit Prophet

by Noella Boudart

December 21, 2008

Nobel Peace Prize laureate Muhammad Yunus discusses the unexpected upside of the economic crisis, and what needs to happen next.

GOOD: What do you make of the economic crisis we're now in?Muhammad Yunus: It's been a tough year for several reasons, for poor people particularly, given the oil-price rise, the food-price rise, and the total collapse of the financial system in New York City. These are the negative things that have happened.G: What are the global implications of the crisis?MY: It's like a tsunami that's coming. Most countries will say, "Oh, we're safe from this crisis." But it's such a big pull on the whole economy. I think there are lots of lessons to be learned from it. One will be how we structure the economy. Everybody will be questioning today's capitalism, casino capitalism, real capitalism, and responsible capitalism. We have gone beyond the limits of the market economy-turning the market into gambling casinos.G: Are there any indicators we can look to for how this might play out?MY: On the positive side, it's been an exciting year because there are lots of things on the way to happening. First of all, more poor countries-like China and India and Bangladesh-are seeing high economic growth and the reduction of poverty. This is very happy news. Globally, the rate of people getting out of poverty in 2008 is much higher than ever before. It is also very exciting if you look at the state of technology coming out to support the reduction of poverty-the expansion of mobile phones in China, in India, in Bangladesh, in Indonesia. It became a household thing. In the remotest village in China, you see cell phones everywhere.
Globally, the rate of people getting out of poverty in 2008 is much higher than ever before.
G: Why does having a cell phone alleviate poverty?MY: One of the problems of poverty is the remoteness of people disconnected from the system. Mobile phones become a bridge to the world, to the market, to the economy. [Let's say] someone comes to buy your eggs and offers you a price, but you don't know what the real price is in the market. So you pick up the cell phone and check it out. You can call up anybody, find information, email information, and can be connected without depending on a middleman. It gives people a voice; it helps. This becomes a focal point of the future.G: What else do you think can help?MY: There is a misconception that the only way to help the poor is to give them charity. That's not what poor people need. Poor people need opportunity. The misconception is that they are incapable, but the poor are as capable, innovative, and creative as anybody in the world. All they need is the right kind of opportunity so that they can use this ability to discover their own capabilities and change their lives.G: What do you think needs to happen now?MY: First of all, we have to go back to asking, What is responsible capitalism? What are the limits of our business? We cannot be seduced by limitless, profit-making parties. Number two, why are we in this deep crisis, and why are we trying to bail out the program? Why don't we have confidence in the marketplace? Once we get out of these problems, two years or more years down the line, do we go back to where we started from, or do we have some cleaner, more decent plan? We need to make the market a self-regulating, self-correcting system. We have to redesign the system.
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