Friday, October 13, 2006

2006 Nobel Peace Prize

The Nobel Peace Prize has been awarded to Mohammad Yunus and the Grameen Bank.

Yunus, who earned a Ph.D. in economics from Vanderbilt University, began making microfinance loans to poverty-stricken families in his native Bangladesh in 1974 during a devastating famine. Soon thereafter, he decided to conduct a test of microfinance by establishing Grameen Bank ("Bank of the Villages"). The idea was to make small loans to families who otherwise would be unable to get credit in an effort to help them establish home-based businesses.

As of May 2006, Grameen Bank had 6.61 million borrowers with branches providing services in over 70,000 Bangladeshi vilages. Ninety-seven percent of borrowers are women. In 2005, the average loan balance per borrower was $85. In spite of the small average balance, Grameen Bank has loaned almost $6 billion in the thirty years since its establishment. Its loan recovery rate is an astonishing 98.85 percent and, since 1995, the bank has operated without donations.

Grameen Bank, which has earned a profit every year except 1983, 1991, and 1992, has a program of interest-free loans for the poorest of the poor in Bangladesh. The "Struggling Members Programme" has 81,000 members who repay their loans at a rate as low as 4 cents per week.

What does any of this have to do with peace? In the conclusion of Seeking Security in an Insecure World, Dan Caldwell and I note (pp. 186-87) that "security today is indivisible" so that even "a narrowly self-interested security policy cannot be narrowly self-interested."

Everywhere we look, we see connections between various sources of insecurity. Economic insecurity may lead to slash-and-burn agriculture, with deforestation (and environmental insecurity) as a result. The devastation of an ecosystem may, in turn, create a refugee crisis that leads to ethnic conflict. An intrastate war may generate a market for arms traffickers. Trafficking in small arms and light weapons may then open up a network through which chemical, biological, or even nuclear materials are traded. The proliferation of weapons of mass destruction may make it possible for terrorists to acquire a nuclear device. And so on.

Poverty alone does not generate conflict. The vast majority of the world's poor suffer quietly. But poverty is an underlying factor that can lead to instability. Even the Bush administration, in the most recent iteration of The National Security Strategy of the United States acknowledges this fact, calling assistance to the poor "a strategic priority" and stating that "America’s national interests and moral values drive us in the same direction: to assist the world’s poor citizens and least developed nations and help integrate them into the global economy."

In 2004, the Nobel Committee recognized the connection between environmental security and peace by awarding the Nobel Peace Prize to Wangari Maathai. This year, the Committee has recognized the connection between economic security and peace.