Monday, December 31, 2007

There's an idea afoot that economics will never be the same again after londoners and other world entrepreneurs have got at it in 2008 thanks to the Future Capitalism liberation led by Dr Yunus

but before we boldly go when none has gone before, perhaps there are some questions stimulated by early reading of Yunus new book on Social ABC (Action*Business*Change Capitalism): to communalise, prepare the way, ensure we are going on near enough the same future history journey

I ask readers of the book to help-including the 1000 we are sampling out of London - what Q&A can we voice to help those who havent got the book see why there is a completely new invitation? here from Yunus- your deepest grassroots project can connect with yours and ours and all of their connections can change capitalism if we free business from its 90 day extraction metrics chains, and make each social business measurable to compounding its future mission for life - Yunus has sorted out the maths of this; he's demonstarting how to do it by finding partners in nthe largest Base of the Pyramid experiments any nation has ever witnessed let alone Bangladesh; he's also a banker who is not interested in owning poverty solutions but listing poverty's crucial problems and cataloguing all known open solutions alongside each other so you can choose from or improve the menu at source

question 1 and some answers to impriove might be:
Yunus Flow Q&A1
Q: Truly, what’s use of globalisation economics? -why do people do economic theory?

To let every person and locality see and map what exponentials are rising and crashing their futures...

To ground the overall integration of societies in the united goal of ending systemic poverty..

I would particularly like to hear Rebecca’s views on this Q&A if time permits

Support for these answers and vocabulary:
Truth and system transformation vocabulary of Gandhi and Einstein

First 140 years of severe entrepreneurial questioning of great and good on future exponentials rising by The Economist; interesting now that Economist 2.0 may be called Asia Rising

World wars as churchill pointed out in 30s (and Gore has borrowed in 00.s) escalated by lurking over inconvenient truth – ie not intervening in time to prevent disastrous compound consequences

Tuesday, December 25, 2007

Draft book talk written by Dr Yunus , 25 December 2007 -given for open source use by Yunus at Grameen Dhaka 6 January:

While free market capitalism is thriving globally almost unopposed now and bringing unprecedented prosperity to many, half of the world lives on two dollars a day or much less. Eradication of poverty remains the biggest challenge before the world. Colossal social problems and deprivations, mostly poverty-related and very unevenly distributed around the globe, continue to shame us everyday. Obviously the free market has failed much of the world. Many people assume that if free markets can't solve social problems governments can. After all government is supposed to represent the interests of society as a whole. But decades and even centuries of experience has shown that while government must do its parts to help alleviate our worst problems, it alone cannot solve them

Fortunately for us there is a keen desire among many to lend a hand through charity for addressing the problems of poverty and other social problems. Charity is rooted in basic human concern for other humans. The concern in nowadays usually expressed in the shape of non-profits and NGOs which may take various names and forms. Then there are aid organisations sponsored by rich governments bilateral and multilateral. Nonprofits and aid organisations are trying to keep the problems within some control. But charity is a form of trickle-down economics; if the trickle stops, so does help for the needy. On the other hand multilaterals like Word Bank focus only on growth as the means of helping the poor, but cannot see that the poor people can be actors themselves. There are serious questions about the type of growth that can help the poor. As another response to the global social problems some businesses are identifying themselves with the movement for Corporate Social Responsibility (CSR), and are trying to do good to the people while conducting business. But profit-making still remains their main goal, by definition. Though they like to talk about triple bottom lines of financial, social and environmental benefits, ultimately only one bottom line calls the shot: financial profit.

I always believed that poverty can be totally conquered quite soon if the right approach is adopted. I based my belief on the inherent ability of the poor that can be unleashed once they are given the opportunity to help themselves. This I have proved in action through three decades of experience with Grameen Bank in Bangladesh, which basically recognised that credit without collateral is a fundamental right of the poor. Our success with this in my own country has been widely replicated all over the world including in some of the richest countries; and the Nobel prize 2006 for me and Grameen Bank has been told in my earlier book: 'Banker to the Poor'. In this new book I have described the further revolution of Grameen system. But more importantly I have introduced and elaborated here my broadened concept of Social Business, that Grameen experience has led me into.
Grameen allowed the poor to be an actor in the free market and to enjoy some of its fruits to try to come out of poverty. It is fundamentally a business model, pure and simple. This is a Social Business. There can be other Social Business not necessarily involving microcredit. They are just like any other business; but for social objectives and not for personal dividend. I have tried to show in the book why Social Business can succeed in addressing social problems where other means mentioned above have failed. Social Business should not be confused with the term Social Enterprise which is used in a more encompassing sense and includes NGOs, personal initiatives, charities etc and may include Social Business too.

Social Business introduces a totally revolutionary dimension to the free market economy. It keeps all the mechanism through which the normal Profit Making Business (PMB) works and prospers - capitalization, expert business management, competitiveness etc - but investors here do not receive any dividend though they can recover their investment if they want to reinvest in other Social Business or PMB. The satisfaction gained in achieving the social goals are the only motive behind the investment and the business will be evaluated according to that standard. Essentially it is a no-loss, no-dividend business aimed at social objectives -education, health, environment, whatever is needed. The profits here remain with the business and help it grow further. The whole thing is based on the premise that entrepreneurs need not be motivated only by the profits they personally receive, but can also be motivated by social goals and may enjoy success there with equal satisfaction. The important thing is not to mix up a Social Business with a PMB. In fact, the inclusion of Social Business alongside PMBs in the business world will give free market capitalism a larger, nobler and a more fulfilling purpose. Its advantages over straightforward charity are many - efficiencies, continuous use with each turnover, competition with PMBs following the same rules, utilization of business innovations being some of the most important ones.

There can be two types of Social Business. Type one focuses on businesses dealing with social objectives only, as has just been mentioned. Type two can take up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits. There are various ways how the ownership can go to the poor. The two types can be mixed together in the same Social Business as has happened in the case of Grameen Bank. In a similar mixture of the two types, a socially beneficial rural toll road can be built by a company as a Social Business whose ownership will belong to the poor.
On the other hand a huge project such as a Deep-Sea Mega Port in Bangladesh I have been advocating for, which will be used by several countries in the whole region and can potentially change the economic face of Bangladesh, can be built by a Social Business owned by the poor women of the country.

Is this an utopia? Will there be Social Business outside the realm of microcredit? Who will invest in such Social Businesses? I could answer these questions confidently in the book, not only because I have faith on my idea and on the ability of entrepreneurs to have social motives as well as profit making motives; but also because I am seeing this actually happen at this very moment. I have devoted a good part of the book on the details of the first such Social Business we have started - Grameen-Danone Comany which went into operation in early 2007. The idea of the company was born over just a casual lunch I had with Frank Riboud, the Chairman and CEO of Groupe Danone, a large French corporation -- a world leader in dairy products. It took just that time for me to convince him that an investment in a Social Business is a worthwhile thing for Danone shareholders. Even though it will not give any personal dividend to them, he believed that they could go for it when everything will be explained to them. However, it took somewhat more time to fix up the modalities , the product (a fortifies sweet yogurt for the poor malnourished children of Bangladesh at a price they can afford), the financing, tax and regulatory issues, new yardsticks for evaluating business, and many other such details. And I have devoted many pages of the book on these details to show how all these things can be taken care of. The yogurt 'Shoki Doi' (Energy Yogurt) is already in the market. The Grameen System has invested in a second Social Business - this time an Eye Hospital where the poor can have eye treatment and cataract operations at a very low cost and all others in the small town and villages around will have an excellent medical facility where there was not any like that before.

Social Business is a new concept and its practice is just beginning. As my book reveals, it has to make a lot more explorations while gaining more experience. There are challenges to be faced and solutions to be made. For example, we had to invent a totally innovative marketing system to keep the market fragmented so that the low cost "Shokti Doi' is reserved only for the poor children and does not appear in the urban market for the well to do. I have also touched upon other issues such as how can the ownership of the Type 2 Social Business be transferred to the poor, or how can the wonderful opportunities offered by IT be best deployed for the Social Business.

One thing is very clear to me: that with the Social Business taking off, the world of free market capitalism will never be the same again, and it then will really be able to put the deathblow on global poverty. I am sure many business wizards and successful business personalities will apply their abilities to the new challenge - the challenge of creating a poverty-free world within a short time. At the moment we are seeing merely the line of the horizon. Soon a good part of business genius of the world will devote itself to this new goal of social good. A whole new stockmarket with it new indices will thrive in the financial capitals of the world motivated by this new incentive. It will accelerate the process of poverty eradication to an unthinkable pace using the same market mechanism which accelerated the global prosperity for the rich in the first place.