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close this bookOvercoming Global Hunger (WB)
close this folderSession four - lessons of experience
View the document(introduction...)
View the documentLessons of experience
View the documentDiscussant remarks
View the documentFloor discussion
View the documentSpecial address - ending hunger: a global concern

(introduction...)


Lessons of experience

Muhammad Yunus

It has been 2 memorable experience to participate m this conference. I have been feeling outraged by the behavior of the financial institutions around the world for the past many years. Coming here, hearing the Bank's vice president Dr. Ismail Serageld in saying on behalf of the Bank that the Bank is feeling outraged by the poverty situation chat exists in the world, for the first time I felt slightly relieved about my own outrage.

Now that this outrage is felt at the flagship of all financial institutions in the world, I am hoping that something will happen to change the existing situation. Financial institutions have treated the poor with complacency and with indifference. They have continued to operate with a caste system that they created for mankind, categorizing the poor as untouchables. Of course, instead of using a rude word like "untouchables," in their polite Language they describe the poor as "not being creditworthy." Now, if an outrage is felt in the World Bank, and that is translated into action in outrageously unconventional ways, maybe the caste system will be forced out of existence.

Coming to this conference, I feel like I am in a dream hearing the Bank talking about "conscience," not internal rates of return, not all those numbers, but "conscience." I hope conscience has been firmly installed in the Bank, and that conscience is at the driver's seat at the Bank I hope Congressman Tony Hall will not have to repeat his hunger fast again next year to convene another conference to talk about poverty.

I was invited to talk about Grameen Bank While doing that, I end up talking about both.

Grameen Bank and the World Bank. Remarks I have been making about the World Bank and the way it does its business may make my friends a the World Bank feel very unhappy. This would not surprise me at all, because that's the same way we have been feeling about the World Bank, too. But we can work together, we can take joint action to work out of the unhappiness on both sides and get the job done. The big job before us is the creation of a planet totally free from poverty. This can be done if we work together single-mindedly.

Hunger is the worst form of deprivation of a human being. Although inability to access food is the immediate cause of hunger, the real cause in most incidents of hunger is lack of ability to pay for food. If we are looking for a way to end hunger, we should be looking at ways to ensure a reasonable level of income for all Hunger is a symptom of poverty. If we can root out poverty, we root out the systemic cause of hunger.

Poverty Is Denial of All Human Rights

In other words, hunger should not be viewed as a feeding problem. It is a much bigger problem than that I see it as a problem of untying people from chains and barriers created by the societies around them. These chains and barriers have disabled people, crippled them, refused them access to work and income. This situation is described as poverty. Poverty is not the creation of the poor. It is the creation of the "system," which is made up of concepts, theoretical frameworks, policies, and institutions. If we can change the system appropriately, we won't have poverty left on this planet.

Poverty is the denial of all human rights, but we don't feel concerned about it because that's the way the system makes us look at it. The present system promotes the look of indifference toward poverty, not that of concern. More than a billion people around the world are deprived of their human dignity, and the world is deprived of their creativity, ingenuity and productivity. This should be enough cause for concern for anybody.

Each human being is endowed with unlimited potential, but the existing system allows us to unleash only a small part of it The poor never get a chance to explore their potential at all Their potential remains unknown to them forever. The poor keep on suffering miseries and indignities all their lives because they never get a chance to use their capabilities to change their lives This happens because those who design the system and run the system do not care to give them these chances. All they offer them are pity and handouts.

The World Bank's Mission

The World Bank was not created to end hunger in the world. It was created to help development To the World Bank development has meant growth. Single mindedly it pursues growth to the best of its ability until it is distracted by other issues like hunger, women, health, the environment, and so on. It tries to adapt itself to these considerations without giving up its basic goal It adopts the rhetoric of all these issues pretty easily and quickly, but it cannot easily translate that rhetoric into action Conservatism at its core makes doing this extremely difficult.

Two things may have contributed to this conservatism First, the World Bank does not have any compulsion generated by the theoretical framework within which it operates. This framework does not assign any urgency or primacy to poverty reduction As a consequence, its pronouncements about poverty reduction get translated only through humanitarian add-one, like safety nets and so on Second, people who work at the World Bank were not hired to eliminate poverty from the world They were chosen for qualities that may not have immediate relevance for poverty reduction.

The World Bank Needs to Be Changed

For the World Bank to take poverty reduction seriously, these two issues have to be resolved in favor of poverty reduction. This may require us to go back to the drawing board, to design the Bank from scratch. We shall also have to design a theoretical framework in which poverty reduction will have a central place. We shall have to define goals in terms of measurable reductions of poverty each year, for each country, and set a date for freeing the world from poverty once and for all. We shall have to design methodologies and work habits that are pro-poor, and hire people who have the ability and commitment to do the job with all the seriousness it deserves.

Until this restructuring of the World Bank is done, to achieve its poverty reduction goal the World Bank could immediately create a window (like the International Development Association) with an exclusive mandate, managed by people hired exclusively to achieve the goals set in the mandate Poverty reduction should not be mixed up with the usual World Bank projects. The new window should formulate its own business practices rather than follow the existing procedures, which are not conducive to poverty reduction efforts. The hallmark of this window would be that it would not claim to have all the answers It would have the humility to ream, experiment, and continually seek better answers.

It is very important that we change the World Bank to create a poverty-free world The World Bank is the flagship of all the development banks in the world All regional development banks, specialized development banks, and national development banks follow the lead of the World Bank. Ever non bank development institutions follow the World Bank without ever raising a question. Its influence is global and total. Unless we change the course of this flagship we cannot change the course of the ships charting their own courses behind it.

All these changes can come about only if we find poverty totally unacceptable, if we believe that poverty can be eliminated at an affordable cost, and if the basic technology to eliminate poverty is known to us (and we can improve on it as we proceed) We need unshakable political will to end poverty and hunger.

Grameen Bank: A Bank for the Poor

Current conceptualizations of poverty provide no help in the alleviation poverty. These conceptualizations are based on the assertion that the poor are responsible for their poverty They are poor because they are lazy. They are poor because they lack skills, or initiative, ambition, or entrepreneurial qualities They are poor because they suffer from cultural backwardness or they have bad habits (dunking, drugs, and so on). Working on this conceptualization we produce programs and projects to make the poor give up their "bad habits" and acquire "skills" and "attitudes" that we think they should have Obviously, we don't make much headway through these efforts because of the wrong start.

In Bangladesh we run a bank for the poor We think of the poor differently We think they are as capable and as enterprising as anybody else in the world Circumstances have just pushed them to the bottom of the heap They work harder than anybody else They have more skills than they get a chance to use. With a supportive environment they can pull themselves out of the heap in no time We offered tiny loans to the poorest people in one village in 1976 People showed how good they were in using the money to earn income and pay the loans back. But that's not how conventional bankers look at the poor To them the poor belong to the class of untouchables Encouraged by the results we expanded our work to two villages, ten villages, one district, and then five districts At no point did we have any problem getting our money back. But all along conventional bankers told us that what we were seeing was not the real thing. The "real thing" is that the poor have no will to work, they have no ability, they will never return your money.

For a while you feel confused What is real? What you hear about the poor or what you experience with the poor? We relied on our experience We kept on expanding Today Grameen Bank, the poor people's bank in Bangladesh, operates in 34,000 villages, exactly half of all the villages in Bangladesh. Grameen Bank currently lends money to 1 7 million borrowers, 94 percent of whom are women The borrowers own the bank. We lend more than US$30 million each month in loans averaging less than US$100 each. The repayment record of our loans is more than.

98 percent Besides income-generating loans we also give housing loans. A typical housing loan is US$300. We have given more than 220,000 housing loans so far with a perfect repayment record Studies done on Grameen tell us that the borrowers have improved their incomes, widened their asset base, and moved steadily toward crossing the poverty line and toward a life of dignity and honor. Studies also tell us that the nutrition level in Grameen families is better than in non-Grameen families, that child mortality is lower ire Grameen families than in non Grameen families, and that adoption of family planning practices is higher in Grameen families than in non-Grameen families All studies confirm the visible empowerment of women.

All these facts only add up to say that if we had changed our banking system the poor would have had a chance to change their lives. If we can change our development banks, this would make poverty reduction happen much faster.

We Do Our Business Differently

In many ways we do our business differently than other banks, including the World Bank. For one thing we don't blame our borrowers if things don't go right Instead we blame ourselves. We train our staff to find fault with themselves, not with borrowers We tell our staff "Things will go wrong only if you don't do it right".

We take quite a bit of time preparing our borrowers to learn how to make decisions within their five-member groups We raise questions concerning their reactions should one of them fail to pay his or her weekly installment We repeat the following advice many trees to them so that they will remember it when the occasion arises: "Please never get angry with the person who cannot pay the installment. Please don't put pressure on her to make her pay Be a good friend, don't turn into an enemy As a good friend your first response should be, Oh my God, she is in trouble, we must go and help her out” We advise them "First find out the story behind the non repayment. From our experience we cart tell you that most often there is a very sad story behind each case of non repayment When you get the full story you'll find out how stupid it would have been to twist her arm to get the money She can't pay the installment because her husband ran away with the money. As a good friend your responsibility will be to go and find her husband and bring him back, hopefully, with the money.

"It may also happen that your friend could not pay the installment because the cow that she bought with the loan money died. As good friends you should promptly stand by her side, give her consolation and courage at this disaster. She is totally shaken by the shock of the event You should cheer her up and prepare her to pull herself together. Ask Grameen to give her another loan, and reschedule and convert the previous loan into a long term loan.”

Grameen reminds its staff that no borrower should, at any time, get a feeling that she has added to her misery by joining the Grameen group. We are in the business of reducing people's misery we tell them, not increasing it If we are not capable of doing that, we should dose down our shop and find something else to do for a living.

The Poor Suffer Because of Countries' Debt Burdens

Stories that we hear about the enormous debt burden accumulated by a Large number of countries around the world and the miseries caused by the structural adjustment programs imposed on them by the World Bank make us feel that our two banks work quite differently. When we hear about how countries are made to pay these debts through the nose, surrendering the bulk of their import earnings, leasing out valuable resources at throw-away prices to make extra income, sacrificing social and environmental considerations to earn enough to repay their huge debts, we find it difficult to accept this as banking Causing misery to people and to nations cannot be banking.

At Grameen we follow the principle that the borrower knows the best. Of course, the World Bank follows a very different principle. We encourage our borrowers to make their own decisions. When a nervous borrower asks a Grameen staff member: "Please tell me what would be a good business idea for me," the staff member knows how to respond to the request He or she is trained to respond in the following way: "I am sorry, I am not smart enough to give you a good business idea. Grameen has lots of money, but no business ideas. If Grameen had good business ideas also, do you think Grameen would have given the money to you? It would have used the money itself, and made more money.”

But it is quite different with the World Bank. They give you money. They give you all the ideas, expertise, and everything else Your job is to follow the yellow lines, the green lines, the red lines, read the instructions at each stop, and follow them The World Bank is eager to assume all the responsibilities They don't want to leave any responsibility for the borrower, except the responsibility for the failure of the project.

The World Bank approaches its borrowers through a string of powerful missions. The missigns are so plentiful that at no point are you too far away from the next World Bank mission Despite all the arrogance of expertise, supervision, and money, the projects don't always work out It is not fair to blame the borrower for failure of projects and make the poor suffer for it.

We Need the World Bank on the Side of the Poor

Banking can be done in a humane way, in a pro poor way. We must make serious efforts to find this way and put it into practice The World Bank is the most powerful financial institution in the world. To eliminate poverty from the surface of the earth we must learn to bring the full force of this institution behind this effort This needs to be done with the utmost urgency and seriousness.

Discussant remarks

Sekai Holland

The Association of Women's Clubs (AWC) is forty three years old this year Founded by a school teacher, Helen Vera Mangwende, the AWC has 40,000 membres, 80 percent of whom live in rural Zimbabwe, organized around 1,789 projects and clubs The AWC's focus is on skills training for disadvantaged women to equip them to improve themselves and the performance of their duties in the household and in community development Since 1986 the AWC has operated programs in the five Mozambique refugee camps to teach women refugees the same courses available to local AWC members Returning refugees and groups in other Southern African Development Community countries have requested that the AWC come to their countries to assist them to set up similar development structures. The AWC and women in Manica Province, Mozambique, have one project they are now implementing jointly.

Although Zimbabwean women were fully involved in the sixteen-year War of Liberation for independence, thirteen years later, while Zimbabwean women have made significant legal gains they have lost on many fronts in the household, in the community, and nationally. For example, there were women who were full cabinet ministers in 1980, but now there are none Women have lost their ministry, which is now a department in the President's Office. Women are no longer a pressure group in Zimbabwe These losses have intensified the need for strengthening women's NGOs.

Since 1980 the Zimbabwean government has made every effort to ensure the adoption of sound food security strategies to end hunger in every household However, persistent droughts, the AIDS pandemic, the prolonged global recession, the collapse of the communist bloc in Europe coupled with the flight of aid from Africa to Eastern Europe, the rise of racism and sexism despite the current popular positive rhetoric on the African woman's burden on the work front, and the intro auction of the Economic Structural Adjustment Programme (ESAP) are some of many factors that have hindered progress Organizations such as the AWC have therefore been forced to restructure to meet their members' needs in this new situation The AWC has also incorporated a Drought Preparedness, Food, Nutrition, and Health Project as an integral part of its new Five-Year Programme (1992-97) to ensure that when the next drought strikes, its members do not suffer as they did the last time.

The AWC's Drought Preparedness, Food, Nutrition, and Health Project is a direct result of members' experiences during the recent drought, the ESAP, and the present steady spread of the AIDS pandemic through Zimbabwe The AWC has 1,440 small agricultural projects that include gardening, piggeries, rabbit and goat rearing, cattle fattening, and poultry production In the new program these are divided into two categories along with water and sanitation projects. In the first category members are trained to grow crops and raise animals and poultry for daily domestic consumption, and in the second they develop their activities into business ventures.

For example, with a US$100 donation, members of the Zvishavane Agricultural Women's Training Centre bought 150 day-old chicks, feed, and medication. The chickens were sold at eight weeks and some profit made. The proceeds were reinvested into purchasing 200 more chicks, and the cycle continues. In this small way the centre modestly embarked on the Food, Nutrition, and Health Project The Training Centre is in the dry belt, where such projects are part of the district's food security. The members are now developing this small project into a business venture and plan to set up a modern chicken factory to slaughter and dress chickens supplied daily by each member.

The AWC also had a successful Mother and Child Care, Family Planning Project with the Marie Stoppes Foundation, a British-based organization, and other partners that trained 200 locally based AWC area trainers in reproductive health and child care. The new AWC AIDS Awareness Project relies on this resource. Zvishavane members have long requested the setting up of a clinic focusing on AIDS, hence the "Health" in their Food, Nutrition, and Health Project at the Training Centre One hundred and eighty AWC AIDS shelters are planned to provide members with information and education.

As a model for ambitious business ventures members are inspired by an AWC club in Masvingo region that has built its own candle making factory This club decided to diversify its business interests from handicrafts, agriculture, and other activities associated with women's work, and has so far succeeded in realizing its dream It has created jobs for its community in Masvingo.

The AWC story is one of grassroots women's struggle, courage, and the resilience to open up space for women's participation in development at ale levels of society for more than four decades by strengthening the operations of their organization. In reviewing the past we realized the value of reinforcing the gains already made.

The AWC taught the women self-reliance mechanisms such as electing a committee and selecting one trainable person among them with leadership and literacy skills, that would be designated as an area trainer and would be trained each year. Its new structure is decentralized so as to provide an organization for rural women run by themselves m their own villages and for their own benefit to provide an environment for women to socialize with one another, and to provide them with skills training to equip them to carry out their diverse activities.

The experience of working through donor financed projects and having accounting systems that were different for each donor led to the AWC becoming accountable to the donors and not to its members. The AWC has now developed internal systems to make it accountable to both members and donors The donors must also accept that there is a policy change by the AWC from the welfare type of project previously favored by donors to the new AWC, which has a development program where by projects are being developed for specific regional, district, and club situations and needs over the next five years.

There is a saying in rural Zimbabwe that you can tell AWC members' families because they are the healthiest and best looking, best dressed, and best fed in the village The homes of members are the cleanest in every village. Their crops and animals are the healthiest and best looked after. Songs and drama by village youths, male and female, and by members all revolve around the importance and successes of clubs' work in rural Zimbabwe.

African women have always been partners in development, although they have not been regarded as such since colonialism For example, when the country was occupied in 1890 by the Pioneer Column, the leader of the tough resistance they faced was an African woman, Nyakasikana Nehanda. When NGOs were first started in the 1920s, women took this opportunity to found their own NGOs to improve society. African women refused to dissolve their organizations and chose to restructure and adjust them to changing environments as illustrated by the AWC's restructuring exercise. Yet these brave efforts have not significantly improved women's status in Zimbabwean society.

Despite the Zimbabwean government's brave efforts to explain the benefits of the ESAP, AWC members continue to be increasingly hard hit by it The average per capita income of AWC members is Z$33 per year Retrenchment of workers has devastated members as many are affected by the loss of remittances from relatives working in towns The removal of subsidies without alternative measures to support those least equipped to help themselves has brought hunger back into the streets and homes of Zimbabweans and has introduced the new element of street kids everywhere. Girls have been removed from school and many pushed into prostitution in this AIDS pandemic to earn income to help meet their families' needs. The list of negative drastic changes caused by the ESAP grows daily with the reintroduction of medical and school fees. The number of Zimbabwean women dying in childbirth has doubled since the introduction of the ESAP. AWC members believe that the ESAP has prevented their new program from full implementation to date.

The North says that major funding should be directed to NGOs and African women at the grassroots level. The AWC, a community-based organization, has relied on members' participation to produce a comprehensive, people-centered program based on the needs of 40,000 African women who are among the poorest of Zimbabwe’s poor. The AWC needs seed money now for the new program to take off The World Bank will hopefully Listen, study, and learn from the experiences of the AWC and other NGOs and introduce policies and programs that will have people-centered adjustment programs based on participation of the world's poorest to approve them and their societies.

Floor discussion

An exchange between the speakers and discussants follower It was initiated by Ismail Serageldin's commentary.

Ismail Seragldin: I am surprised to hear today a description of the World Bank that is very different from the Bank that I know and work in My colleague here at the podium was telling me that we need to know more about how the World Bank works, and my brief discussion with Muhammad Yunus yesterday about his statement also revealed that people may need to know more about how the World Bank really works.

In some ways, we are very much like Grameen Bank in the sense that the less you have, the higher priority you get, not the more you have, the more you get The latter is not the policy of the Bank. In fact, every time a country achieves a certain level of development it ceases to be a borrower from the World Bank. We automatically say, "You now have no business with the World Bank ".

When I first started working in the Bank we were working on Greece, Ireland, and Spain. These countries all have graduated, and the Republic of Korea, Thailand, and others will probably be following suit very soon We exert ourselves for the poorest countries by our unremitting efforts to obtain the concessional funding they need, by mobilizing support for IDA By providing IDA support, far from forcing countries to pay through the nose for debt, IDA provides tremendously generous grants The grant element in IDA is calculated by the Development Assistance Committee at more than 80 percent. The terms for the repayment of IDA credits are forty years' with ten years of grace, zero interest, and only three-quarters of 1 percent administrative charge So exploitative repayment conditions are not the Bank's mode of operation.

There is a big difference, however, between working with governments and working directly with the beneficiaries. The Bank is an intergovernmental organization Our mandate, our statutes, are to lend to governments for the purpose of promoting development The examples that Muhammad Yunus gave do not work well in dealing with governments because the people who have gone directly to governments and said to them, "Here, we will lend you money and you know how to use it," were the commercial banks in the 1970s. They created the debt problem because they kept lending more and more money to governments without any regard to how this money was being used, whether to build lavish new capital cities or to purchase luxury items This was known as sovereign debt We all know what happened to those loans because giving directly to governments is not the same thing as giving directly to beneficiaries.

Two more points need to be made about working with and through governments It is our experience—and I am honored to say this in the presence of a most notable African leader President Masire that whenever a national government, a national leader, has articulated a vision, the Bank and others have tended to support it Where differences have existed, they have been technical differences The success stories invariably come from people who say, '´This is what we have done. This is our program," and the Bank supports it.

It is unfortunate that in many other situations, government officials tend to blame the conditions on outsiders Governments do not discuss all the contents of their programs sufficiently with their people. They do not have the kind of dialogue with civil society that is necessary to create a broadly based consensus on "What is our situation, and how are we going to solve it?" In such cases, when confronted with difficulties many government officials find it expedient to blame it on the Bank or on the International Monetary Fund or on some international entity, but pointing to others is not the same as dealing with their own problems When governments do take responsibility, not only does success come to them, but the donor community and everybody else will support them.

With tremendous modesty, President Masire talked today about what has been achieved in Botswana. What other country has had to launch special programs to feed as much as 30 to 40 percent of its total population? Would it have had the dialogue to build the consensus with its people that Botswana achieved? And on top of this, President Masire said that he wants to engage the nongovernmental organizations and the civil community more actively in this debate. This is the land of action that I salute and to which we should dedicate ourselves.

People talk about the World Bank as if it were the bogeyman. This is not true. If we listen to the discussions we have been having here, we could build a better understanding of one another's strengths and comparative advantages and see how we could help one another achieve that objective to which we must all commit ourselves and dedicate ourselves: the abolition of hunger in our lifetime.

Muhammad Yunus: Concerning the difference between borrowers as individuals and borrowers as governments, I still think the relationship has a lot more similarities than dissimilarities. If I were lending to a government, I would rather wait for it to formulate what it wants the money for, because just as we do not tell our borrower what she should be borrowing money for, I would not tell the government what it should be borrowing money for.

The way the World Bank does this, and I am not saying this in a spirit of hostility, is to send a mission to find out what you, the country, needs, and tells you what you need. And then it sends a project preparation mission, because you do not know how to prepare your projects, and says, "We will do it for you." Then the preappraisal mission comes, the appraisal mission comes, the inception mission comes. This is how the projects are prepared.

If I were the World Bank I would say, "You do your programming. If you need assistance in terms of money to pay for experts of your choice, tell us, and we'll give it to you, but you prepare it If you want us to come and comment on your programming, we'll do so. This is your project You prepare it." If the government does not prepare the project, it does not own it.

I can give you an example When we were preparing a Grameen Bank proposal for what we wanted to do in the next three years, IFAD sent one of their staff. He introduced himself by saying: "IFAD sent me to prepare your proposal " I said, "Who is IFAD to prepare our proposal? We shall prepare our own proposal." IFAD had not even bothered to tell us that they were sending somebody to prepare our proposal I said, "We don't recognize you." So the poor IFAD representative was hanging around, sending faxes back to his Rome office. Finally, a formal letter came to us, and I said, "I don't recognize this letter, because this letter has to come from the government." So he could not do anything, and he went back, but before he went back, he tried to explain to me, "You tell us what you want, and I'll write the thing in the language of IFAD" I said, "I will write my proposal in my language. If IFAD does not understand it, IFAD has to hire an interpreter to understand what I wrote, because this is my proposal, and it is up to IFAD whether or not to give money".

This kind of thing happened not only once, but all the time when we created the Grameen Bank. At that time, we were receiving funds from IFAD, but project execution was by the Asian Development Bank Each mission that came from the Asian Development Bank caused us nightmares. They hated us for everything we did Whenever we heard that the IFAD technician was coming we spent sleepless nights, as if we were doing something criminal. When we became a bank, the mission that arrived in Dhaka was furious. They said, "You have no right to convert into a bank " I said, "We struggled very hard to make a bank. Now you tell us that we have no right. Who has the right?" He said, Without the permission of IFAD, you cannot do this." I said, "Who is IFAD that I have to get their permission? If you don't want to give us the money, keep your money. We will I find other money".

For another example, the World Bank pressured the government of Bangladesh about making up its mind about a credit program. The president formed a high-level committee and asked me to be part of it. In the committee meeting I said, "In this program, 60 percent of the money will be used for technical assistance, which means that experts will come to Bangladesh to tell us how to run a credit program. They are also saying how they are so impressed by the Grameen Bank So they do not need to send people from Washington or anywhere else. We are here, and we do not need any money to tell you how we run a credit program ".

So the minister of planning asked me to write up the project and gave me a deadline of twenty-four hours At a meeting the next day the committee reviewed the proposal and approved it, but the World Bank continued to pressure us. It insisted that the new foundation I had suggested, which would receive funds from the government and make them available to any NGO that was interested in lending money to the poor at 2 percent interest, had to receive US$75 million from the World Bank We said we did not need the money and the World Bank insisted that we come and negotiate a US$75 million loan Finally, by going to the president of the World Bank and then sending a negotiator to the Washington meetings, we managed to convince the Bank that we really did not want their money for this project. This was not a pleasant experience, and what I am trying to say is that we can do business differently.

Sekai Holland: I wanted to respond to the comment that we do not have enough information about the Bank. The reason InterAction asked me to come and speak is because we produced a five-year program in March this year and we came here in a desperate effort to get some funding in the United States To this day we have not received one cent from one donor.

What we are doing right now is trying to understand the different policies of the different donors. While we are doing that, the 66 workers of the Association of Women's Clubs servicing 40,000 women have been working voluntarily, for no pay, for 12 months. I do not know how many tunes we have been told that the World Bank has US$10 million for women, the USAID has US$10 million for women. I am sick and tired of hearing about how women are a priority and they ought to be supported, yet when we produce something the donors give us every excuse as to why they cannot put money into the Association of Women's Clubs, and they have done so even though we have asked them for a financial comptroller to come for two years to train us in how to look after money.

So the point about the 'world Bank that I found out yesterday is that it is our bank, and I found out that the people I ought to be fighting with are the Zimbabwe government But I find that hard to believe, because the same problem that we have met in trying to get a revolving fund to finance our 1,780 clubs must be the same problem our government is racing with the World Bank in getting money into Zimbabwe, because the problem in Zimbabwe is that there is no cash to do anything.

A number of participants commented from the floor; then the speaker responded

Participants' Comments

First Boor participant: I know that Muhammad Yunus has a wonderful story to tell about how Grameen workers find the poorest when they start a new group, and I would like to ask him to share that story with everyone here.

Second floor participant Statistics reveal that in many countries persistent structural hunger is more an urban than a rural phenomenon. I was recently in Kenya for a meeting with representatives of the United Nations Children’s Fund, and this is what they have found in Kenya. Yesterday I spoke with a colleague from Brazil. Brazil is 80 percent urban, but according to his figures about 75 percent of the hunger in Brazil is in urban areas. So what we are calling for is assistance to the urban poor to produce their own food in the way Ruth Bamela urged us.

Now before anyone thinks this is rather farfetched, a recent survey carried out in Moscow found that two out of three families in greater Moscow are producing food. A survey in Kenya found that three out of five families in Nairobi are producing food. In most countries, urban agriculture is women's agriculture rather than men's. I was recently in Uganda, where the women headed families leave the villages and move to the city In the city they have to produce their own food So urban agriculture in many countries is women's agriculture.

Virtually no research or development assistance has been devoted to urban food producers, yet we all know that within a few years half the world's population will be urban So I call to your attention the need to empower the poor in cities and towns to achieve food security by producing their own food, which means that they have to have access to credit, to land (which government gets involved in), and to water This will also help cities become more environmentally sustainable and less polluting.

Third floor participant I have been an admirer of Grameen Bank for many years. The bank does not only lend money, it contributes very effectively to health, nutrition, education, and welfare in general How does it do this and what is the relationship between the bank and the government concerning these social services?

Fourth floor participant: We are an international private voluntary organization, and in the last fifty years we have built up a program that is now a US$200 million program worldwide, but we built it up community by community, through participation. My question is, how does one reverse the process with the Bank, whereby you start with multimillion dollar loans and then get to the community level?

Fifth floor participant: The US Congress, especially President Clinton, is in the process of slashing foreign assistance, including foreign assistance that goes to the poorest countries and to poverty-focused programs. I understand that Muhammad Yunus met with President Clinton and had an opportunity to talk with him about that problem. I would be interested to hear his impression of President Clinton's interest.

Speaker's Response

Muhammad Yunus: On the question of how we find the poorest person in the village, we follow two basic principles One is that people should not come to the bank, but that the bank should go to the people. Our staff travel around and meet people to talk to them about their needs. The second principle is the reverse of the banking principle that the more you have, the more you can get, so if you don't have anything, you can't get anything We say that the less you have, the higher your priority. So we try to identify those who have nothing at all.

During out staff training we explain things in this way. When you explain that you represent a bank that lends money to poor people, everybody around you is likely to turn into a poor person Anybody who says, "I am a poor person, give me the money," will surely not he a poor person, and you can ignore that person You should walk around and try to find out where the poorest person in the village lives. If a man comes up to you and claims to be that person, accompany him to where he lives, and that way you can see how well or badly he lives for yourself.

Once you get in the house and you find out that he has a relatively decent house and a few possessions, then you tell him, "Look, you say you are a poor person, and maybe you are, but don't you think there are people who are not as lucky as you in this village, who are maybe worse off?" Then he will admit that he knows several people who are worse off then he is. Then you say, "Would you please accompany us to show us who is the poorest in your estimation?" So he becomes a guide to take us to the poorest person. And if you see that this is a house in name only, and that all the owner and her children have is maybe a couple of pots and pans, a few bottles hanging from one comer, and some rags, then you will know you have found the poorest person.

Then you explain what Grameen does and how she can borrow from Grameen. And after a while, when you ask for her response, she will say, "Oh, no, I can't take money, and I don't need money. What can I do with money?" And you know right away that she is the person you are looking for So from now on, you have to build up her confidence because she has not gotten an offer of help before, so naturally she is suspicious. So you have to build up her confidence so that one day, maybe several weeks later, she will say, "Yes, let me try to find some friends to form a group."

So this is how we try to find the poorest person, and the first few groups that Grameen forms in a village have to be made up of the poorest people, because otherwise we will keep moving up to a higher level, and we will never come down to the poorest. Our approach is the same whether we are in an urban or a rural area, a hill region or a plain region, and the causes of poverty and hunger are the same, institutions that deprive the poor of a fair chance at access to credit.

As for producing food, all poor people do not have to produce food as long as they have the income to buy it from a job. I do not see how a poor person can be engaged in food production in an urban situation.

In the case of social services supplied by the government in Bangladesh, not too many of these services are readily available to the poor Our health service is free, because it is aimed at the poor However, anything that is free only serves the interests of the rich, because they have the power to capture it, and most of these benefits will be in urban areas, where the powerful and the rich tend to live. If the benefit ever get to the rural areas, the same thing will happen. So all these services like health and education do not really go all the way down to the poor. In Grameen's case, we try a different approach to see it these benefits can be provided through the Grameen groups.

We have something called sixteen decisions. These are decisions that the people themselves have arrived at through intensive dialogue within their Grameen Bank groups about their problems and what they can do about them From these discussions over the years, we now have a list of sixteen decisions, for example, we shall not take any dowry at the time our sons marry and we shall not give any dowry when our daughters marry Giving a dowry is a killer for poor people and can lead to even deeper poverty and to debt with the moneylenders.

Another example is that we shall grow vegetables all year round, eat plenty of them, and sell the surplus. Malnutrition is rampant in Bangladesh, and one of the ways people can improve on the nutrition situation and alleviate certain vitamin deficiencies is by eating plenty of vegetables. So we explained this to them, they discussed it, and they decided to grow vegetables year round, and Grameen took the responsibility of selling vegetable seeds at cost to the borrowers. Today Grameen sells more vegetable seeds than the government agency responsible for selling vegetable seeds.

Another example of a decision is that we shall send our children to school and help them to earn enough to pay for their education One of the ideas that emerged during our discussions was that if you plant enough vegetables so that you can sell some in the market, you can use the money to buy all the stationery that your child will need in school. And growing vegetables is fun for children, who would also enjoy raising chickens to earn money to pay for other necessities, while at the same time learning how to do things for themselves.

About the meeting with President Clinton, one of the things we discussed was the USAID and the foreign aid situation, and I expressed my views about foreign aid. In the foreign aid situation, the donor country writes the check, but gives the wrong address. In the case of Bangladesh, it says US$100 million to Bangladesh under the assumption that Bangladesh is a poor country, so everybody there must be poor What happens is that the richer people in Bangladesh grab that check and use it for themselves You have to address the check to, say, the poorest 50 percent of Bangladesh's population, so that the officials who are responsible for it now have to find these people.

I also mentioned to President Clinton that when I had visited the USAID on previous occasions, I felt as though I had entered enemy territory, but this time I felt at home Everybody was speaking the same language that I spoke. I thanked him for making this happen, especially the change in policy on macroeconomic lending. I said, "I wish you could use your influence to change the World Bank in the same way."

Finally, I delivered a letter from many of the NGOs who are represented here today that asked him not to make the planned reduction of about 50 percent in aid money and poverty reduction funds. He read the letter and said. "I'll make sure that there is no cut." I hope he remembers.

Special address - ending hunger: a global concern

Boutros Boutros-Ghali

The topic of this conference should not be controversial. No one seriously disputes that hunger is an evil that should be eradicated. Nevertheless, hunger exists despite our consensus that it should not, and despite all our efforts Many famines still afflict our world, and in some parts of the world, whether harvests are good or bad, hundreds of millions cannot afford the food they need. Population trends raise the specter of an increase in hunger and malnutrition in the comming decades.

We are here to discuss what should be done. Before we can do that, we must be dear about the causes of hunger. Basically, there are three:

· Hunger that arises during a sudden crisis
· Endemic hunger that comes from poverty
· Hunger caused by an imbalance between population and food supply.

The world now produces enough food to feed its population. The problem is not simply technical. It is a political and social problem. It is a problem of access to food supplies, of distribution, and of entitlement. Above all, it is a problem of political will.

The most obvious manifestation of hunger comes with a sudden crisis, when large numbers of people are deprived of access to food. The crisis could be a drought or a flood, or it could be a military confrontation or a civil war.

Weather-related famines are not new, but because of population growth, many more people are affected today, and modern communications see to it that we are all made aware of each crisis more vividly than before. Many more countries today have the capacity to cope with weather related crises. India provides an example. There, an efficient system of early warning, drought relief, and food distribution has been established.

Southern Africa gives us the example of the famine that did not happen In 1992, when 18 million lives were at risk governments of the region mobilized their own resources for food and emergency aid, and the humanitarian program launched by the United Nations (UN) attracted timely support Tragedy was averted.

However, famines are not caused by natural disasters alone. They arise all too often from managed causes. War and civil unrest are the most common causes of large scale hunger in many of the humanitarian crises in which the United Nations is involved. Often entire populations are displaced from their homes or seek refuge in neighboring countries, and sometimes famine is used as a weapon in civil or ethnic conflict.

When populations are displaced or forced to flee, food production suffers. Military operations often target the most fertile areas of a country. They leave barren desert where once green fields and farms provided food for thousands. Once proud food producers crowd in makeshift camps awaiting international aid. However, aid is often stopped by the second scourge of war: attacks on ports and food collection centers, and on food relief workers themselves. In Somalia nearly half a million people, most of them children died because food relief was not able to reach them. United Nations food convoys, as well as those of nongovernmental organizations, were impeded by brutal gangs Anarchy reigned, and the weak suffered the most But today even the most unfair critic of the United Nations can testify to the fact: nobody dies of hunger in Somalia.

The second cause of hunger is endemic poverty. If hunger caused by crisis requires emergency relief, hunger caused by poverty should be the target of development efforts. Here a great deal has been achieved. Let us take heart from the fact that the number of hungry people in developing countries has been falling during the last fifteen years As a proportion of the world's population, fewer people are hungry today than at any other time in history. Except in Sub-Saharan Africa, nutritional trends have improved in all regions of the world.

This brings me to the third cause of hunger: an imbalance between food requirements and food production. Hunger is often the result of development models that tended to favor the urban economy and life style at the expense of the countryside and agricultural production. In some cases, the priority given to the production of export crops to generate hard currency caused food production to decline Because of falls in commodity prices and the resulting decline in export revenues, many countries are now vulnerable to food shortages and crises.

The answer is to raise agricultural productivity Farmers should be given the incentive to invest in food production However, attempts to raise production at all costs may be counterproductive. In many countries food production is endangered because of damage to the environment Land degradation, water scarcity, and a growing vulnerability to stress are real threats to food security Agricultural development should therefore be sustainable.

Careful attention should be paid to the market for food, and hence to the price of food Economic reform, which includes the removal of bureaucratic pricing mechanisms, is necessary In the short to medium term, however, the result can be prices higher than most people can afford. When this happens, hunger and malnutrition may appear among lower-income groups Adequate safety nets for the poor are, therefore, an essential component of any economic reform program.

Hunger is a global issue Its existence violates that most basic of human rights, the right to survival, and it is our responsibility as an international community to guarantee that right The United Nations is central to this task because the solutions must be comprehensive. Food security requires an across-the-board effort Its political, social, economic, and technological factors must ale be involved and integrated. Above all, food security must be guided by a political consensus on the need for action, as well as on its nature and scope.

Often, in responding to hunger the dividing lines between relief and development work have become blurred. Some agencies are involved on both sides, others only on one. The General Assembly, in its Resolution 47/150 of March 31, 1993, dealt with the issue of coordination. It affirmed the critical importance of establishing the most effective arrangements for managing and coordinating the UN response to world food and hunger problems. Within the United Nations Secretariat the responsibility for coordinating work on humanitarian crises rests with the Department of Humanitarian Affairs; responsibility for developing policy and coordinating action on poverty, hunger, and malnutrition rests with the Department for Policy Coordination and Sustainable Development.

In situations of humanitarian crisis, the United Nations system has responded to some of the worst manifestations of hunger in recent years The World Food Programme (WFP), the High Commissioner for Refugees, the United Nations Children's Fund (UNICEF), the United Nations Development Programme (UNDP), the Food and Agriculture Organization of the UN (FAO), and the World Health Organization are involved in this effort I pay tribute to the dedicated men and women who work for the relief of hunger, often risking their own lives.

To attack endemic hunger, we must address its underlying causes The real answer to hunger lies in measures to eradicate poverty. The system is therefore targeting endemic poverty, low agricultural productivity, and deficiencies in food production and distribution. The FAO, the International Fund for Agricultural Development, the UNDP, and UNICEF, among others, are working to these ends World Bank lending for agriculture and rural development, for antipoverty programs, and for social development plays a central role.

The World Food Programme the food aid organization of the United Nations—provides relief food aid to victims of natural and man-made disasters It also supplies food aid in support of development in general. During the past three decades, the WFP has invested approximately US$13 billion, which included more than 40 million tonnes of food, to combat hunger and promote economic and social development The WFP now handles more than one-quarter of all food aid moved globally Most of the food is donated by industrial nations or is purchased from developing countries. WFP assistance is specifically targeted to projects assisting the poorest people in the poorest countries, with the objective of long-term improvement in their lives, but the balance between development and emergency assistance has altered considerably in the past three years as conflict and civil strife have increased throughout the world.

The United Nations Development Program is following an integrated approach to hunger The UNDP seeks to address all aspects of development that have a bearing on food and hunger These include providing drought relief, helping in disaster mitigation, halting desertification, tackling crop disease, promoting agricultural self-reliance, and improving the infrastructure required to move farm products to the people The focus of the UNDP's work is on building national capacities in all these areas.

UNICEF is another major actor in this sphere At the World Summit for Children in 1990, heads of state and government made important pledges They accepted far-reaching goals, to be achieved by the end of this decade, to reduce hunger drastically and to mitigate its impact on children's nutrition The world's children are the world's future Today, UNICEF is carrying those goals forward through its three way concept household food security, the health environment and health services, and care for the well-being of the next generation.

From the experience of the past and the improved study of the present, some lessons emerge:

Coordination at the field level and at head quarters is of the essence. The need for coordination is particularly acute where relief operations are conducted in conflict situations. Hunger relief efforts must have safe access to populations in need.

· Methods of relief delivery must take into account the need to ensure a continuum from relief to rehabilitation, reconstruction, and development.

· Hunger is not a single, uniform scourge. Several types of hunger can be identified. One solution will not solve them all, but all of them are easier to pursue in a growing economy

· Although economic growth is necessary to eradicate hunger, it is not sufficient-. Greater attention to poverty alleviation, health, education, and human fertility is necessary. If solutions are not to produce added hardships, taking the social factor into account is essential

· Many problems of hunger, including famine, require building sound institutions particularly at the community level—for food production, storage, and distribution. Food security at the household level must therefore become a guiding principle for agricultural policies and antipoverty programs

· Action must be taken in good time All too often the international community has reacted at a very late stage, when a famine has reached catastrophic proportions. Similarly, malnutrition can be swiftly reversed by targeting aid toward vulnerable groups: children, women, and the aged.

Today, some 800 million people suffer from insufficient or poor nutrition We have the experience and the resources to feed them all We do not always have the political will to do so. However, I am most encouraged that the political will is emerging. I have just received a letter from President Carlos Menem of Argentina He suggests setting up an international volunteer corps for the fight against hunger [his is certainly an initiative that merits serious consideration.

Economic growth and prosperity will help eradicate hunger

Peace and stability will help eradicate hunger. Institution building will help eradicate hunger Targeting assistance will help eradicate hunger Sustainable development policies will help eradicate hunger.

We have the understanding' we have the means, we have the tools to remove the shame of hunger from the world. with political will we can' together, do so.