10.19.2006

Charity is Not an Answer to Poverty

You usually think of Nobel Peace Prizes winners as diplomats and civil
rights leaders. But this year's winner was economist Muhammed Yunus
of Bangladesh, whose Grameen Bank was the original microlending entity
that spawned the entire microlending industry.

It's a simple but powerful premise: lift people out of poverty by
giving them enough capital to buy something that they can use to
produce income. Bamboo plants from which furniture can be made and
rickshaws which can be used in a taxi service are two examples of
assets that are not consumed, but that rather continue to produce
value for their owner. Combine that with the fact that most of the
loans go to women, all too often excluded from their country's power
structures and capital markets, and you have yourself a model that is
commendable on many levels.

To paraphrase a well-known axiom: give someone a chicken dinner, and
you feed them for a day; give them a chicken whose eggs they can sell
in the market, and you feed them for a lifetime. And that's the
beauty of the Grameen model: sustainability and dignity are vastly
superior approaches to poverty reduction than charity and dependence.
Or as Yunus himsefl put it: "Charity is not an answer to poverty. It
only helps poverty to continue. It creates dependency and takes away
individuals' initiative to break through the wall of poverty.
Unleashing of energy and creativity in each human being is the answer
to poverty."

Well said. And well done.

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