Seoul mayor takes cue from Nobel laureate on helping the poor
Muhammad Yunus speaks during a press conference at Seoul City Hall, Monday, where Mayor Oh Se-hoon was also present. Yonhap
Yunus condemns 'old' capital systems, promotes entrepreneurship over seeking jobs
By Ko Dong-hwan
Bangladeshi social entrepreneur Muhammad Yunus, who won the 2006 Nobel Peace Prize for pioneering the concept of microcredit and microfinance, met with Seoul Mayor Oh Se-hoon at city hall, Monday.
Oh had requested the Nobel laureate, whose Grameen Bank offered loans to entrepreneurs who are too poor to qualify for traditional bank loans, to teach him how to help the economically vulnerable groups in Seoul.
The lesson from the Bangladeshi economist was both straightforward and challenging for Korea, a country that emerged from the ashes of the 1950-53 Korean War to become one of the world's representative success stories of capitalism lifting a country out of extreme poverty.
The Seoul mayor gave his book, “Future” (2019), to Yunus. The book contains Oh's thoughts on South Korea's biggest future agendas like the low birthrate and North Korean denuclearization. Yunus gave his book, “A World of Three Zeroes” (2018), which portrays his version of a perfect world with zero poverty, zero unemployment and zero carbon emissions, to the mayor.
Yunus, now 82, founded Grameen Bank in 1983. The bank prospered and prompted him to establish Grameen America in 2008 to reach out to poor entrepreneurs ― mostly women ― in 35 metropolitan cities in the U.S. Hundreds of thousands of people benefited from the service.
Seoul Mayor Oh Se-hoon, left, and Muhammad Yunus hold their books they presented to each other during a press conference on Monday at Seoul City Hall. Yonhap
“I'm not a mayor, so I couldn't do things that you did,” Yunus told Oh. “I tried to do things in my own ways as a private citizen.”
One of Oh's key policy goals this term is to help the needy residents of the capital. Some of his ongoing or planned policies include the safety income, which allows low-income people to receive more city subsidies and benefit from various other aid programs for households with newborns and children in need of parental care.
“Bangladesh and [South] Korea both started from extreme poverty,” Yunus said. “But [South] Korea moved on and went to the top of the world. Bangladesh is still struggling to get a better life. That's where my work began to see why people (in my country) missed out on all these. Then I focused on the banking system.”
Poverty is not created by people but the system humans have built, according to Yunus. His mission was to “undo” that system. He started by fixing conventional banks, which he felt are “the front door where all those problems begin.”
“Conventional banks go to the rich, we go to the poor,” Yunus said. “The banks go to the cities, we go to the remote villages. The banks go to men, we go to women. The banks have collaterals, we say 'forget about collateral'. We are the only bank in the whole world which is lawyer-free. We created the banking system that doesn't need lawyers so there is no legal document between the borrower and the lender. And it works.”
Muhammad Yunus, right, shared with Seoul Mayor Oh Se-hoon, how he founded and operated Grameen Bank in Bangladesh to help the poor by lending them money and promoting entrepreneurship. Yonhap
Over 200,000 people, mostly women, have borrowed money from Grameen America. Most of them did not even have reliable credit track records. But 14 years since the launch of the bank, the repayment rate on the loans stands at 99.5 percent, according to the founder.
So how could such a banking system work with no precluding conditions and no collateral offered? Yunus believes in another timeless philosophy: all human beings are born as entrepreneurs. His job was not just lending money, but to inspire borrowers to become more than just debtors.
“I keep saying that job (in the capitalistic sense) is a wrong idea,” Yunus said. “It created all the problems of wealth concentration. It goes to the people who hire people to make themselves rich. Human beings are not slaves to work for somebody else, whether you are born in a poor family or rich family. But (in reality) a child from the poorest family will never have access to the banking system, while a child from the richest family will have all the resources from the bank. So, to undo the whole banking system, we created the one based on what is a social business, which isn't aiming at perfect maximization.”
Yunus told Oh to pursue “new roads” as the mayor looks for more ways to help the vulnerable groups in his city.
Despite his vision, Oh has been mired in criticism from some members of the public for what they claim are bigotry and discrimination. The finger-pointing came from groups with physical disabilities, non-permanent work contracts and sexual minorities, to name a few.
“You keep on following old roads, you always end up with the old destinations,” Yunus told Oh. “Old roads will never take you to new destinations. That's where imagination takes place. As an elected person yourself, one of the responsibilities you have sworn to oath is to imagine things and inspire people. With a clear vision and determination, there is so much to do beyond.”