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Need to redesign the system to create wealth for all, says Bangladeshi economist

Professor Muhammad Yunus
DUBAI: The microcredit model has proved that millions of women can become entrepreneurs without any training or education, according to Nobel laureate Professor Muhammad Yunus.
He also believes that the financial system needs to be redesigned to create a world that does not just benefit the rich.

Speaking to Arab News during his visit to Dubai recently, Professor Yunus said that the model of microcredit was to lend small amounts of money, about $20-$30, often to illiterate women in villages.

“These are women who never crossed the boundaries of their village. Yet they dare to take a $30 loan and become an entrepreneur,” Professor Yunus said.

The Bangladeshi economist hopes that young people will change the world. “They are not contaminated by the world’s way of doing things. They can start afresh as they have technology in their hands and can mold things their own way,” Professor Yunus said.

Professor Yunus talked about his most recent book, “A World of Three Zeroes,” which highlights the need for zero poverty, zero unemployment and zero net carbon emissions.

“The sum and substance of it is that the world is going in a wrong direction. The speed of that direction and its negative impact is getting higher and higher so we are sitting on a ticking bomb, which can explode at any time,” he said.

He said that a large chunk of the world's wealth was becoming concentrated in the hands of a few. “Today 1 percent of the world population owns 99 percent of the wealth, and tomorrow it will be worse,” he said.

This will lead to massive discontent and political and social disasters, he said. “I call it a huge mushroom of wealth which continues to grow but the ownership of the mushroom is by fewer and fewer people.”

Professor Yunus said that he sees selfless business as social business, which essentially means a non-dividend company to solve human problems.

“We created a lot of those businesses. Microcredit is one. We didn’t create it to make money for us but to solve the problems of other people. We needed to create counter banking, which is the microcredit that we did via Grameen Bank,” he said.

According to him, the bigger challenge is that the system is working against the poor. “So no matter what you do, you only do marginally better. You are not participating in filling the huge gap where wealth concentration has taken place,” he said.

“In order to do that, you have to redesign the machine itself. Microcredit is one piece of that machine, and not the whole machine. The entire machine has to be redesigned in a way in which wealth goes in both directions,” he said.

He said that the existing system had led to a perpetual model in which the condition of the poor may improve but at the same time the condition of the wealthy will zoom sky-high.

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