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Presentation Speech by Professor Ole Danbolt Mjøs, Chairman of the Norwegian Nobel Committee, Oslo, December 10, 2006.

Ole Danbolt Mjøs delivering his presentation speech. Copyright © The Norwegian Nobel Institute 2006 Photo: Ken Opprann

Your Majesties, Your Royal Highnesses, Laureates, Excellencies, Ladies and Gentlemen,

“The Norwegian Nobel Committee has decided to award the Nobel Peace Prize for 2006, divided into two equal parts, to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below. Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.”

Those were the words in which the Nobel Peace Prize award was announced on the 13 th of October this year. Today the time has come for well-deserved celebration! Muhammad Yunus and Grameen Bank: congratulations on the Nobel Peace Prize! And congratulations to you, Mosammat Taslima Begum, who will receive the prize on behalf of Grameen Bank.

Not all the journalists covering the announcement of the award at the Nobel Institute knew who Yunus and Grameen Bank were. Some thought Grameen Bank was a person. Let that be the reporters’ problem. The many who did know of both held that they ought to have received the Peace Prize long ago. In 2002, Bill Clinton put it this way: “Dr. Yunus is a man who long ago should have won the Nobel Prize and I’ll keep saying that until they finally give it to him.” Now Clinton will no longer need to remind us.

This year’s award has been well received, internationally, in Norway, and not least in Bangladesh. It almost defies comprehension that when, as chairman of the Nobel Committee, I walk up to a microphone at the Nobel Institute in Oslo and announce that this year’s Peace Prize is going to Yumus and Grameen Bank, politicians and papers in large parts of the world begin to comment on, and to a large extent to applaud, the Norwegian Nobel Committee’s choice. And what is even harder to believe: there is an outbreak of joyful demonstrations in Bangladesh. For several days one could almost have described the country as closed because of happiness. Many said that this was the greatest thing to have happened to the country since independence in 1971.

In recent weeks, growing numbers of people have become acquainted with the outlines of Yunus’s exciting story. Trained in economics in the United States, he returned to Bangladesh in 1972 and took a chair in economics at the University of Chittagong. In 1974 he underwent a personal crisis during the country’s famine. It shook him to see such poverty. And he asked himself, “What is the point of all these splendid economic theories when people around me are dying of hunger?” As early as in 1976, he hit on the idea of opening a bank for poor people. He lent 27 dollars out of his own pocket to 42 craftsmen in a little village in Bangladesh, telling them that they could pay the money back when they could afford to. In the weeks that followed, he gave the matter a great deal of thought, and decided that there would have to be an institutional solution.

The result was Grameen Bank, which is present today in the vast majority of Bangladesh’s thousands of villages, and which since its formal opening in 1983 has lent almost six billion dollars. Today the bank has almost seven million borrowers. Grameen Bank lends 800 million dollars per year, in loans averaging just over one hundred dollars. The bank is self-financing and makes a profit. The repayment percentage is very high. Muhammad Yunus says, “Lend the poor money in amounts which suit them, teach them a few sound financial principles, and they manage on their own”.

By means of this year’s Peace Prize award, the Norwegian Nobel Committee wishes to focus attention on dialogue with the Muslim world, on the women’s perspective, and on the fight against poverty.

First, we hope that this Peace Prize will represent a possible approach to the Muslim part of the world. Since the 11th of September 2001, we have seen a widespread tendency to demonize Islam. It is an important task for the Nobel Committee to try to narrow the gap between the West and Islam. The Peace Prize to Yunus and Grameen Bank is also support for the Muslim country Bangladesh and for the Muslim environments in the world that are working for dialogue and collaboration. All too often we speak one-sidedly about how much the Muslim part of the world has to learn from the West. Where micro-credit is concerned, the opposite is true: the West has learned from Yunus, from Bangladesh, and from the Muslim part of the world.

Secondly, this year’s Peace Prize places women centre-stage. Over 95 per cent of the borrowers are women, and their liberation is a major concern for Yunus and Grameen Bank. The emphasis on women may have been the most important factor in the success of their work. Women were not alone to begin with, but their proportion rose rapidly. In Yunus’s words, “For women to be granted the loan has a definite effect on the family. There is no need to do more research on that today. Children benefit automatically, with better clothes and food. We can see the situation changing”. Men often spend the money on themselves; women spend it on the family. The bank’s practice has meant a social revolution in Bangladesh. One of the borrowers, Mazeda Begum, has put it like this: “My parents gave me the birth, but Grameen Bank gave me a life”. In today’s terminology, micro-credit is indeed “female empowerment”.

Micro-credit has proved itself to be a liberating force in societies where women in particular have to struggle against repressive social and economic conditions. Economic growth and political democracy can not achieve their full potential unless the female half of humanity on earth contributes on an equal footing with the male.

Thirdly, and most importantly, we have the fight against poverty and for social and economic development. Muhammad Yunus has shown himself to be a leader who has managed to turn visions into practical action for the benefit of millions of people, not only in Bangladesh but also in many other countries. There are now micro-credit programs in nearly one hundred countries all over the world, including Norway. Loans to poor people, most often women, without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.

Numbers soon multiply and swell. But behind each number there is an individual human being. Every single person on earth has both the potential and the right to live a decent life. Across cultures and civilisations, Yunus and Grameen Bank have shown that the poor can work to bring about their own development. In Yunus’s words, “Micro-credit is a well-tried and well-founded method that can bring financial services to the poorest of the poor. Micro-credit promotes entrepreneurship, and puts each individual poor person, especially women, in the driving-seat in their own lives”. Even beggars have become borrowers in the bank. Yunus believes firmly that alms destroy the initiative and creativity of poor people.

As he wanders about in his Bengalese clothes, Yunus is sometimes referred to as a modern Gandhi. He is called the banker of the poorest. And Grameen Bank, which means the village bank, is the world’s biggest bank for poor people. Through their deposits, poor people own 94 per cent of the bank. The remaining 6 per cent belong to the Government of Bangladesh. The bank is based on a different philosophy from that of normal banks. Yunus says micro-credit is more about people than about money. It is a question of trusting people. Credit means to trust, to give someone “credit”.

The poor people organize themselves into groups, often of five women. It is the group that is granted the loan and is responsible for repayment. The group meets regularly to sharpen each other’s perceptions of borrowing, work, repayment and saving. The members undertake to work for food production, pure drinking water, hygiene, health, family planning, economy, discipline, community and motivation in the group and in their families. The groups form networks with other groups. At the grass-roots level the groups thus help to build up communities. Groups of women who assume responsibility have also recently been points of departure for vaccination and health programs.

The struggle against poverty in the world is an existential struggle for survival. Today roughly half the world’s people live on less than two dollars a day, and more than one billion live on less than one dollar a day, which is extreme poverty. This means that the majority of people on earth are poor. And the majority of them are women and children. This may be the greatest challenge confronting the world over the next few decades. Every country and nation in the world must contribute. It is shameful that far over half the people in the world live under such conditions.

The struggle against poverty is work for peace of the first order.

The Secretary-General of the United Nations, Nobel Peace Prize Laureate Kofi Annan, has said that “Today borders do not go between nations, but between the powerful and the powerless, the free and the enslaved, the privileged and the subservient”. The United Nations’ number one Millennium Development Goal is to halve global poverty by 2015. Achieving that goal will require global mobilisation. Will you join in, will your country join in, will national leaders join in to meet this challenge? There is a long way to go, but we must travel it together. The aim must be peace with justice in the world. And justice means a life in dignity. The Norwegian Nobel Committee underlines that “lasting peace can not be achieved unless large population groups find ways in which to break out of poverty”. Peace with justice must be built from below, by means to which Muhammad Yunus and Grameen Bank have contributed.

The Norwegian Nobel Committee is often asked which concept of peace it applies. The question has come up this year, too. Although the response to this year’s award to Muhammad Yunus and Grameen Bank has been generally favourable, some have asked what micro-credit has to do with peace. They deserve an answer.

The point of departure is always Alfred Nobel’s will. But the fact is that the three criteria for the peace prize which Nobel mentions in his will, work for “fraternity between nations”, for “the abolition or reduction of standing armies”, and for “the holding of peace congresses”, only provide limited guidance. That leaves it to a large extent up to the Norwegian Nobel Committee itself to interpret and concretize the concept of peace. Ever since 1901, this has been a matter for dispute, if not so much within the Committee as in the public domain. When the very first prize was awarded, to Henri Dunant and Frédéric Passy, nearly everyone accepted the pacifist Passy. To some, however, Dunant presented a problem. Was his work relevant to peace? Certainly the Red Cross did excellent work once war had broken out, but what did they do to prevent war?

The earliest prizes went to peace activists of various kinds, to statesmen and, as we have seen, to humanitarian organizations and persons. Then the Committee began awarding the Peace Prize to campaigners for human rights. Again there were prompt counter-arguments. What did human rights have to do with peace? Did not the emphasis on such rights on the contrary tend to arouse conflict? In the 1980s, however, a growing number of political scientists began to take an interest in Immanuel Kant’s analyses of the connection between democracy and peace. In due course, more and more of them came to the conclusion that democracies were peaceful, at least in relation to other democracies. This has now become one of the most “robust” findings in modern political science. It is gratifying to see science now giving its almost unanimous support to a view which the Norwegian Nobel Committee has held for decades.

In 2004, the Nobel Committee maintained that there was a connection between a depleted environment and war and conflict. This year the theme is the struggle against poverty. What has that got to do with peace? This is not something the Norwegian Nobel Committee only hit on this year. Many previous prizes have gone to the struggle against poverty. The distinction between humanitarian work and the struggle against poverty is of course not clear, as the three prizes to the Red Cross and the awards to the High Commissioner for Refugees, Médécins sans Frontières, Mother Teresa etc. all show. In addition, the Nobel Committee has awarded the Peace Prize to the founder of the UN Food and Agriculture Organization (FAO), John Boyd Orr, and to the man behind the green revolution in agriculture, Norman Borlaug. So in principle this year’s Peace Prize is less of a novelty than many appear to believe, even granting that micro-credit as a tool for overcoming poverty is completely new in the context of the Peace Prize.

Sound common sense is not to be despised. Most people would probably agree that the fact that wealthy Europe has been at peace in recent decades, while there have been many conflicts in poverty-stricken Africa, must have something to do with living conditions. The causal connections are complicated; everything can rarely if ever be attributed to a single factor. We would nevertheless intuitively believe that there must be a connection between poverty and conflict. But we do not have to rely solely on intuition. In the summary of research on this subject in Human Security Report 2005, we read that “Indeed, one of the most striking findings to emerge from conflict research is that most wars take place in poor countries, and that as per capita income increases, the risk of war declines”. This is not to say that poor people are necessarily more violent than the more prosperous. Central government resources are also important. The more prosperous a country is, the more resources it has with which to resolve the problems that can give rise to conflict.

There is not just one way out of poverty. There are many. This year, however, the Norwegian Nobel Committee wants to draw attention especially to micro-credit. This instrument has produced good results in Bangladesh. Over the past few decades the country has recorded considerable economic growth. Some of that growth is certainly due to the operations of Grameen Bank and other institutions in the micro-credit field. It will be important to increase the use of this instrument.

In the book Banker to the poor. The story of the Grameen Bank, Yunus asks whether it is really possible to imagine a world without poverty. His own answer is as follows: “We have created a slavery-free world, a polio-free world, an apartheid-free world. Creating a poverty-free world would be greater than all these accomplishments while at the same time reinforcing them. This would be a world that we could all be proud to live in”.

Around year 750 the Chinese poet Tu Fu wrote, in Peter Bilton’s translation:

Swarming cities are smithies for swords
Better forge a ploughshare, forge a harrow
Where there now are tears and sand
There would be silk and corn
The widow would be a farmer’s wife at her silk loom
The soldier a farmer behind his ox and plough
Our silent people a choir in a song
For two voices, singing of silk and corn.

Today the Norwegian Nobel Committee wishes to express its admiration for the work Muhammad Yunus and Grameen Bank have done for thousands upon thousands of ordinary people in Bangladesh and in many other countries. We hope the Peace Prize will be a source of inspiration in the continuing work for a world without poverty. That is not a goal we shall reach in the next few decades. But we are on the way. Today we congratulate and celebrate the two of you, Muhammad Yunus and Grameen Bank. Bangla: Apnader Shobaikay Ushno Obhhindon: Warmest congratulations to you all! Tomorrow we shall hurry on together towards the goal of a world without poverty.