Friday, October 13, 2006

Nobel Peace Prize goes to Economist

U.S. trained economist Muhammad Yunus and the Grameen Bank were awarded the Nobel Peace Prize for their efforts to help "create economic and social development from below" in Bangladesh by developing a system of small-scale loans (microcredit) that has helped millions people escape the grind of poverty.

Microcredit is the extension of small loans, typically $50 to $100, to entrepreneurs too poor to qualify for traditional bank loans. Grameen Bank, founded by Mr. Yunus, provides credit to "the poorest of the poor" in Bangladesh, without any collateral, according to the Grameen Bank web site.

According to the Nobel press release: “Micro-credit has proved to be an important 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 participates on an equal footing with the male."

The Marginal Revolution blog writes that: “This is a wonderful choice. The funny thing is, they never would have considered this guy for the Economics prize”, although I would bet he has done more to reduce poverty than anyone who has won the Economics prize.

You can read the story of Professor Yunnus and micro credit on page 207 (Chapter 8) of your text book (highly recommended reading) or on Wikipedia ,or on CNN or wherever you want in cyberspace.

The choice of Dr. Yunus to win the Nobel Peace Prize seems like an excellent choice to me. “Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty.”

Extra credit: If you are the first student to send me an e-mail ( identifying the name of the U.S. university where Professor Yunnus taught economics, you will be rewarded with two extra credit points.

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