Economists on a Mission: Saving the World (no less)

So we (economists) couldn't do with just one Nobel prize dedicated for us: we had to go get the Nobel Peace Prize as well!!!!

I was literally DANCING this morning when I read that Professor Muhammad Yunus, one of the most fabulous, amazing, kind, intelling, and brilliant people on the face of this earth won the Nobel Peace Prize 2006.



Apparently, Martti Ahtisaari, former president of Finland and president of the Crisis Management Initiative, through which he brokered the peace agreement between the government of Indonesia and the Free Aceh Movement (GAM, by its indonesian acronym), was the frontrunner for the Prize. Were also tipped: Chinese activist Rebiya Kadeer, a Muslim woman championing the rights of the Uighur people in China; Bono and Bob Geldof (yeah right); the International Crisis Group; and even john bolton, whose name doesn't even deserve capital letters (nominated for some reason by the swedish former deputy prime minister) - don't get me started on what risk this son a bitch is a shame to the world, to the UN, and to the country who sent him to the UN; and Carla Del Ponte, chief prosecutor at the International War Crimes Tribunal for the former Yugoslavia. (they should have sent Bolton to Ms. Del Ponte, rather... :)
But the Nobel committee had something else in mind, apparently.
But it was a man who really changed the lives of millions of people, lifting the poor out of poverty through the creation of micro-finance, which is a system by which tiny tiny loans - sometimes as low as 20 dollars - allow their recipients to create small projects, to start a business, and, bit by bit, to lift themselves out of poverty.

This Econ professor from Dhaka, Bangladesh gave the first micro-loans from his own pocket. He later went on to found the Grameen Bank. The basic idea is simple: those people know what they need and they'r smart enough to do it. (read Sendhil Mullainathan from Harvard Uni on the economic rationality of the poor: they're not less rational than anyone else, it's merely that shocks are far stronger when you live on such a low income..)

So he decide to be the Banker of the unbankable, those whom commercial banks would reject for absence of collateral (or for no reason at all).

It works. Repayment rates are super high (90% +), higher than most commercial banks, despite high interest rates (due to high transaction costs).

He also created Grameen telecom, which provide telcom services to the poor. I will let you check out yourself!
As well as numerous other projects which made him one of the most influential and respected people in the world.
And despite all the success, it never to his head. He still dresses the way he does in Bangladesh. He connects with his clients with the same ease he connects with Heads of States - and Harvard and MIT students :)

Neither did his organisation. As I write this - 24 hours after the prize was awarded to Yunus and Grameen Bank, the homepage of the Bank remains about Microcredit, not the 1 million dollars prize they'll be receiving.

Why was I dancing this morning?
First, because it was one of the best surprises the Nobel Committee has offered us in years.

Second, because I think the man is absolutely fabulous. I met him last year (SEE ABOVE!!!) and I think he deserves the prize very much. The award is an honour to the Nobel Peace Prize more than it is to Yunus.

Third, because we have the same first name :). Actually, after Mohamed El Baradei, that makes him the second in a row to win the Peace Prize with this first name. We rock! :)

And fourth, because he is what I hope to be one day. He is a scholar, an economist, who has changed the world. He has reminded me that the true duty of an economist - of a development economist, furthermore - is not to do an economic model in the warmth of the Littauer building (that's where Harvard Econ department is, for non-Cambridge dwellers) but to go out that, to dirty one's hands, to make oneself useful. And that's the true reward of it all. Yunus will live forever, in those whom he helped change their lives, and in their children who will have a brighter future, thanks to this man they probably never heard of.

The man is a real model for us all. He stands for what our work knows best, and he is the personification of development econ.
May we have the strength to walk in his footsteps!

Muhammad Yunus: you are a role model for all of us. God bless you! And thank you, thank you so much!