September 04, 2016 01:00 By The Nation 4,073 Viewed
Nation Multimedia Group editorial board adviser Suthichai Yoon talks with 2006 Nobel laureate and microcredit pioneer Muhammad Yunus, the architect of a movement sweeping through Fortune 500 companies, and a ‘Three Zeros’ action plan to preserve the world
Recognised globally for pioneering the concepts of microcredit and microfinance, Bangladesh national Muhammad Yunus proved that even the poorest of the poor can work to bring about their own development. Founder of Bangladesh’s Grameen (Village) Bank, which has been providing access to credit for the poor for more than 30 years, he has today turned his attention to what he calls “social business”. This aims to overcome poverty through non-loss, non-dividend companies dedicated entirely to achieving a social goal. Under this model investors get their investment money back over time, but never receive dividends beyond the initial amount. “Social business,” he told Forbes magazine last year, is a complement to traditional profit-maximising business.
You came from Rio, what were you doing at the Olympics?
I was a torchbearer and I was also invited to address the International Olympic Committee meeting on why [sport] should have social dimensions. No matter whether it’s a global, regional, national or local event, if a national Olympic committee gets the idea to do something special with the social dimensions, a huge number [of people] will get involved.
What are the social aspects of sport?
Several things. For example, there are four cities in the running to host the Olympics in 2024, Paris, Budapest, Rome and Los Angeles, selected on the basis of an eligibility checklist. If you put one more condition in that list – the number of social businesses you have in your city – then everyone becomes conscious of it. So candidates have to start social business, otherwise they might not qualify. You don’t need to spend any money, but people become aware about social businesses.
A selected host like Rio must have a legacy programme, [detailing] what you will leave behind [after the Olympics]. The poor, slum children who don’t have education, healthcare – these are all legacy [issues]. You have to build business fund to this city, before and after. It’s not just one shot and then forget.
Bring in educational programmes for students to learn about it. Young people love this idea. They want to get involved [because they look up to] national heroes – the gold-medal winners.
What young people do when they get into a university is they want to mobilise. [In sporting heroes] you have the mobilising force, you have the power to convince.
Private companies hire these celebrities to sell their products. We are already using [this power, but] for commercial purposes.
But is social business sustainable?
Yes, endlessly so. That’s why you have to transform one into the other. You don’t have to spend any extra. When I presented this [idea] in Rio, everybody loved it. They kept asking question after question. And after this, I was invited by the other candidate city, Paris. They want to pick up the [social businesses] idea quickly.
So, when any country seeks to host the Olympics in the future it will have to meet this standard?
Absolutely. Without meeting this standard, they cannot compete. That means you have to be better than the others. This is important as sports are about competitions. So you compete to do good for the young people.
That’s another big step forward for you.
Yes. This is very important. Now we function as a global base.
So, for example, if we are discussing how to set up a business centre in Thailand, we can invite the Thailand Olympic Committee to come and talk about it because they will have already learned about [social business] from the IOC. [Everyone] will be speaking the same language. Previously, it was an isolated system, now it’s part of a bigger picture. Thailand has sports federations, clubs. Every club can do what they like [what suits them in terms of social business].
How did Kasetsart University get interested?
Again, because of the work, because of the lectures … people have seen me talk about this. That’s why they wanted to come and visit us. So they came to Bangladesh.
What is the difference between your AIT [Asian Institute of Technology] and the equivalent at Kasetsart in Thailand?
Ours is an international body and not much involved with the local population. The one at Kasetsart here is for locals. Business gets involved here with local students. It’s more basic, more close to Bangkok, close to Thailand. Once more [people in Thailand] use it, it will become powerful. There will be more resources, more decision-making power, more social power. AIT has so many countries to [cover]. Here it’s more university based.
Resources and preparation are important?
Social business is not about big money, but rather creative ideas. We can start with small one, simple ones. Then social business can expand, and the good thing about it is that the funds you receive are recycled. They don’t disappear. So, after you start, it will keep running by itself.
What role do you envision for the centre at Kasetsart, which is focused on academic pursuits, not social action?
You just initiate the project. Both academic and action-based. They can start “action research”. You do it, and find out, and record it.
One conclusion I have come to – and others have cheered it –is that the present system and academia [too] is not sustainable. So before it destroys itself, we should fix it in a way to help people.
So the idea is to maximise the profit – and the shareholders expect that?
Exactly. So, all the money can be profitable. Today, one per cent of the world’s population owns more wealth than the bottom 50 per cent. This makes people unhappy. People say, “I didn’t get anything, yet I worked hard. I don’t have job.”
That’s why Donald Trump is so popular. He raises these issues and exploits them efficiently.
Yes. Doing this will make you popular. They [promise to] stop Muslims, stop immigration. They stop everything because they want to take care of everything.
You [have to] blame somebody because you have no explanation for why you don’t have enough. You blame “those other people” – in Europe, the [foreign] Europeans who are coming in and taking away jobs, money. But the system is such that even if you stop everything, you still have the same problems. So before it blows up like a time bomb, why don’t we fix it? Social business is one way to do that.
Are you optimistic?
I’m optimistic. You have to protect your planet. You can’t give it away. Here I think of the idea of “Three Zeros”. The first zero is zero poverty, the second is zero unemployment and number three is zero carbon emissions.
Two of them have been accepted as targets by the United Nations. Zero poverty is already there, while zero carbon emissions is what the Paris [Climate Conference] dealt with, although a [target] date has yet to be fixed. Only zero unemployment has not been paid attention to.
Human beings are not born to work for somebody else. Many jobs require no creative power, but in reality we are creative beings. That means you must create jobs for yourself and others. So young people are not job seekers, they are job creators. In Bangladesh, we employ young people to come up with business ideas. We try to make them successful and when they are successful, we take the money back.
Anyone and everyone can start a social business – in Bangladesh, and in Thailand? What if they fail?
Yes, anybody can do it. If you tell young people they can only do certain jobs, you mislead them. Social business will help them. Failure is part of the business. To fail does not mean you fail forever. You fail and you just learn.
Have you visited anywhere in Thailand that could forge the social business pattern?
Everywhere. Bangladesh, Thailand or the Philippines have the same thing. All issues are related to poverty, healthcare, women, housing, environment, education or technology. So it’s up to local interpretation of the kind of poverty you have, the kind of support you have. Government support is the kind that gives money. It’s not a big deal. It’s not sustainable. It does not solve the problem. It only hides the problem. Hiding problems and solving problems are two different things.
But politicians like to give out money…
Politicians love it because it’s easy: if you give money you become a hero. But they are not adjusting – the real issue is the solution of the problem. Taking care of people’s difficulties is part of the duty of society and the government. However, we have to make sure that people are not permanent recipients of state charity.
You try to reverse that direction by exploiting the power of the grassroots.
You have your own power in yourself, you have all the creative power, all the energy. Make sure you can stand on your own feet and feed your future. This should be the message.
How do you explain the difference between social enterprise and social business?
“Social enterprise” is used in a crude, general way. You have social enterprise and you make money. You can have social enterprise and it’s not business at all. It can be a charity programme. It’s a loose term.
Social business is a business which must be sustainable. So it will not give dividends. It’s non-dividend company [in order] to solve human problems for the company.
Anyone can own shares in a social business – foreman, housewife, taxi driver?
And the purpose is to meet a profit goal?
It’s profit for the company, not for the person. Business has to survive financially?
Yes, it has to survive, they have to get money back.
Who ensures it survives financially?
If it can’t survive financially, it’s not a business at all. It should be a business.
How does one choose the right kind of businesses to get involved in?
It depends on your own priorities. Anything. You can make a list of 50 titles and pick one. The one is
the problem. For example, let’s solve the problem of old people: they have been abandoned, no one pays attention to them, they have no money, no healthcare. [Let’s say] you are a doctor, you know these people and you just want to do this for someone in your family, who you see every day.
You have tried to persuade big brands around the world to get into social business.
I’ve done social business [programmes] with big companies such as Uniqlo. [Whether with] big companies, local companies, joint ventures, small businesses, it does not hurt you [to promote social business]. You can bring money in from your foundations, your shareholders, something like that.
And the products sold under social business practice are the same?
Those products have brand names printed on them. Like yoghurt: if you are selling rotten yoghurt, the world will know you are selling rotten yoghurt to poor people. So you must be very careful about what you sell, your quality and your brand. You have to protect your brand. We have to make [the product] top class and at the same time solve the problem of people in need.
Are you using persuasion to put more pressure on these companies?
Sometimes it’s not me doing the persuading. [Instead] the companies want to discuss topics for [social business]. They confirm the business must have a purpose [behind it]. I tell them it sounds good, but it’s still not good enough. I explain that … it’s the people who are the purpose.
Business does not have a mind. The mind is in the people.