Shri Rahul Gandhi in Conversation with, Prof. Muhammad Yunus, Founder, Grameen Bank

31st July, 2020

Rahul Gandhi : How are you Professor? So nice to see you after such a while!

Prof. Muhammad Yunus : Well, I’m so happy that I get a chance to see you.

Rahul Gandhi : One of the reasons I wanted to speak to you is because, you understand finances of poor people and the impact of poverty on women. So, I wanted to get a sense from you on how this COVID crisis and the ensuing economic crisis going to affect the poor, their availability of credit and the women among the poor. What are your thoughts and how should we think about this going forward?

Prof. Muhammad Yunus : It’s the same old story, it’s not new that I’ve been raising this issue. The financial system is designed in a very wrong way. So, Coronavirus, what it has done is revealed the weaknesses of the society in a very ugly way you can see now. These are hidden away into the society. We get used to it. The poor people are there, migrant workers are in the city, hiding in the city. We have people working for us, cooking food for us, security persons, darbaan for us, they are taking care of our children. We knew them. But suddenly we see millions of them on the highway trying to go home. Suddenly, all the city migrant workers are coming out of the city in a big crowd and going out. For a simple reason, they have nothing here, no life here, no money here to survive. So, ultimate place they can go back to is their home. So, desperately they are going home. And then on foot, thousand-mile journeys. That is the saddest part that Coronavirus has revealed.

So, we have to recognize these people. Economics doesn’t recognize these people. They call it informal sector. Informal sector means we have nothing to do with them, they are not part of the economy. Economy begins with the formal sector. We are busy with the formal sector.

If we can only finance them, we can take care of them, pay attention to them, they’ll be moving up the ladder. Because they have the basic ingredients and they know how to fight for their lives. But we ignore them.

Then comes the women. Women are the remotest of all. Looking at the structure, this is the lowest in the structure. They have no voice, nothing in the society, traditions make them completely separate. They are the basic strength of the society. All the entrepreneurial ability, when micro credit came and went to the women, they showed how much entrepreneurial capacity they had. That’s why micro credit is known to the whole world and not just Bangladesh because they have shown their worth. They can fight, they have the skills, artisanal skills and all kinds of skills, beautiful skills. They are all forgotten because they all belong to what we call the ‘informal sector’.

Rahul Gandhi : I mean the tragedy of course is, that countries like Bangladesh, countries like India, these are the biggest assets. These micro entrepreneurs, they are the future. That’s where the money is going to be, there is where the growth is going to be. But for some reason the system is not interested in looking at them at all. For the system, they don’t exist.

Prof. Muhammad Yunus : Absolutely. We followed the Western way of doing things in their financial system, in the economic system. So we didn’t think about the vibrant capacity of the people, countries like India, Bangladesh in the region. They have tremendous tenacity to do things and make things happen. Very creative way. That creativity has to be admired and supported. But government stayed away. It’s the informal sector, you have nothing to do.

Rural economy has become an appendix to the urban economy. Again, a traditional western way of looking at the urban economy is as the hub of activities, the rural economy is the supplier of the labor-it’s the labour producing Factory. And they will be sending their people to the cities to find a job. If you don’t find a job, you have a bad luck and you are locked there inside the city.

Why can’t we have the economy of the rural area built as a separate parallel economy, autonomous economy? Rather than have an appendix like that today. Today, the situation has changed than 100 years back. Technology has given us facility which never existed before. Cities were important because it had the infrastructure. Rural areas didn’t have the infrastructure.

Today, infrastructure is not limited to urban areas. You have the telecommunications, you have the road, you have the transportation, the communications. So everything is there. So what is it that you have to go to the city to?

Rahul Gandhi : But if you look at the way technology is going, decentralization, the mobile phone, the computer basically getting spread all over the world, entering different niches. Probably you’re looking at a future that looks very much like you’re saying. Because 20 years ago, you could possibly utilize the rural economy to do some other type of jobs that is required today. Whereas with technology there is no reason why disaggregated, decentralized manufacturing can’t take place in rural environment. However, you would need to restructure the education system completely. You would need to restructure the Healthcare System completely. You would basically have to restructure the whole thing if you want to move in that direction. I don’t think you can think in the same way and achieve what you’re saying. I don’t think it’s possible. So yeah, I think it’s a completely new page that you’re talking about. I don’t think it’s an incremental thing.

Prof. Muhammad Yunus : Yeah, that’s again another point I want to turn the line because of the Corona pandemic. I said Corona pandemic suddenly stopped the whole machine, the entire economic machine. Now the whole thrust is coming over how quickly we can go back to where you were coming from. I said, what is the hurry to go back? Should we at all go back? Because that world was a very horrible world. It was creating world with global warming and giving us a kind of countdown when the world will be finished in a few years. In a couple of decades or three decades the world will be at a stage where nobody can survive anymore.

Why do we have to go back to that world and why we have to go back to the world with global warming, with wealth concentration. Wealth in that world is moving to few hands and most of the people have nothing to do with that wealth anymore. So why do we have to go back to that system to create wealth concentration? Why do you have to go back to that world where artificial intelligence is taking away jobs for everybody. All the massive unemployment that will be created in the next few decades, do we have to go back to it? As such going back will be suicidal. So this coronavirus has given us a chance to think new. Opportunity to make a break. So the point here is we are not thinking about it, that’s what the point you raised. We got so used to it now. Suddenly we said, ah, we got an opportunity. Now, let’s go different way. And these are the different ways. This is the time to take outrageous decisions. It’s not just about sitting quietly to go back to where we were, and kind of celebrate that we are back again, our doors, our shops are open.

Rahul Gandhi : This model is not an Indian model or a Bangladeshi model. This is a completely western model that we have adopted lock, stock and barrel. In fact we have aped this model and realized that this model is not all it seems. This model has serious problems. This model has serious contradictions. It destroys the environment, it destroys societies? And I mean if I think about Mahatma Gandhi, he, 78 years ago, was saying that we need to think about the rural economy. We need to think about our traditional structures. Now, of course, we’ve had a journey and that’s an important journey. But I think the idea of rethinking some of these designs based on, you know, an Indian structure, a Bangladeshi structure and Asian structure would be quite a powerful thing. So I think, I agree with you that the game needs to be equalized for rural people and an imagination in Corona gives us an opportunity to have a brand-new imagination which comes from within us as opposed to from outside us.

Prof. Muhammad Yunus : Just one little amendment to that. Absolutely agree basic thrust of it. This is not an Asian phenomenon. This is not an Indian phenomenon. This is not a Bangladeshi phenomenon. This is a global phenomenon. Absolutely. The proof is when we started Grameen Bank in Bangladesh lending money, they thought this is a Bangladeshi phenomenon, that this is crazy country, they do crazy things. It suddenly became an Asian phenomenon. They do crazy things. Now, it’s a global. Because it’s not the problem of Bangladesh alone.

Rahul Gandhi : But YunusJi, there are flavors that are local. So for example, I visited you in Bangladesh and the Bangladesh flavor. I agree that the central problem is the same but the flavor and the solution is slightly different based on the culture of the place. For example, we have a caste-based society. We have a completely different type of structure than say the United States which doesn’t have a caste-based society. So our structures that emerge are slightly different even though the problem is the same.

Prof. Muhammad Yunus : I would agree basic thing is the same, you have the caste system, USA has a race system worse than the caste system. You cannot compete with each other. So, with it comes in different shapes and sizes, colorsthat’s all. The human culture is the basic culture. We have to go back to the human culture. We all belong and that’s what happened with the poor women who started joining Grameen bank group, they’re not thinking she belongs to this religion, I belong to that religion. They don’t care which religion they are in. They are in the same group five women from different religion, getting together, working together, become very close friends.

So, the fault is in the design of the environment what you have created around him, around her. So this is the time that coronavirus has put them all into sleep. So don’t wake them up, create new system. Bring up new system, make the beginning of the new system. A thousand-mile journey starts with the first step. Let’s take that first step during the Coronavirus. A very determined first step.

Rahul Gandhi : So, the heart of what you’re saying is that you have to trust and believe in people. That’s the foundation. You start by trusting believing in them, having faith in them and then build institutions that empower that trust? Yeah, exactly. Versus now when we don’t trust you, you are poor so you don’t understand anything. Instead you’re poor, we understand that you understand everything that needs to be understood. We just are going to give you the supporting mechanism that is going to allow you to thrive and grow.

Prof. Muhammad Yunus : Absolutely, and again my experience in Grameen Bank you visited US in 2008 if you remember. And you visited for four-five days, not just one day. How do we do that? What was the basis of that? People were shocked that we are giving so much money in their hand. 1000 rupees for them is a big-money. 2,000 and 10,000 is a big money for them. Those who handled only 10, 20 taka rupees and now you are giving them 1000.

Well I said, we believe in them, we believe in their capacity and they believe in us. It’s a mutual trust. We don’t need any papers. In the entire Grameen system, there is no paper. There is no collateral and I say make fun of it. I say Grameen bank is the only bank in the world, which is lawyer free. We have no legal papers or anything. So if bank can function on trust, it showed the basic strength of the people. When billions of dollars are given away every year as a loan and comes back with interest, then you become a strong organization. Flood comes, Cyclone comes, everything gets washed away, theGrameen Bank becomes stronger.

Rahul Gandhi : But look I have a personal experience of this and I think you’re exactly and sort of you will understand what I’m saying. I came to see you and you know what we built in Uttar Pradesh, the huge institution involving millions of women. And then I found an extremely powerful organization, millions of women, empowered millions of women pulled off poverty. Then I found myself with a government that decided to attack it. So, I agree with you but there is a piece missing in what you’re saying, which is the political reality, which is that these systems that you built, which in a very small way I built in Uttar Pradesh, it disturbs people and then they come to destroy it and you know, you’ll understand where I’m coming from. So I will challenge you and I’m sure you’ll give me an answer. In this environment, where other institutions other political instruments are attacking the type of institution that you are talking about building. How do you defend it? And how do you build it? What are the types of elements that you need to have embedded in it, that can either work with or co-opted these other institutions that are in a sense competitors.

Prof. Muhammad Yunus : Some institutions like government has tremendous power to destroy things and push things away from the action and so on. But my position is, if you’re if you’re doing something for people and people liked it and people enjoy it. No matter how powerful you are, It’s a temporary dislocation, right? This will come back. You cannot stop it because it worked for people and if it spreads and you stop it in Uttar Pradesh, in other States and places they will spring up. With more strength than you have tried because it will come back with a big force and revive again. Because it works for people. It is indestructible. Good ideas are indestructible.

Prof. Muhammad Yunus : But how do you feel about going back? Are you trying to bring out bailout packages and make sure that all the big Industries get back again to directions or this is a time to think a little bit? How do you…

Rahul Gandhi : I think the immediate issue in India, massive issue was the migrants’ issue. Yeah. You know, what you call the micro entrepreneurs, who are suddenly found stranded, found themselves stranded and I spoke to quite a few of them and I saw first-hand what they were going through, literally their world had just fallen apart and they were forced to go back to their Village. So, the first aspect of it was trying to look after those people immediately, and our perspective was give them food, give them cash injection directly to keep them, to keep them, afloat. The government had a different view. They didn’t really do that. They sort of didn’t feel that that was necessary. Then we have this big crisis of millions of people going home walking thousands of miles. I suspect you had it in Bangladesh as well, but I completely agree with you. I have, I think that if you don’t come out of Corona with a new imagination, you’ve missed a huge opportunity both as an individual and as a nation. I think what Corona is telling you is that what you have been doing so far is problematic and as you’re saying reset. Start with a blank page and start with a new imagination, of course, you can’t make a jump like that in governance but at least the mind should go there and then the rest of the institutions and other things will follow. So, I completely agree with you that that if there’s ever been a time for a change in imagination. I think the world changed its imagination after the World War II, the last time the real big imagination changed and I think Corona is such an opportunity that we can just reimagine things and rebuild them. I also think that countries like ours have a bigger opportunity than other countries simply because we have so much more room to play with, so many more younger people, and we have a lot more to build than say the Western World which has already built a lot of their infrastructure.

Prof. Muhammad Yunus : One more question I wanted to ask about again because you have the context of huge big country and huge big Nation. What would you see the next Generation, second generation in India, will see the world like, we are in that part of the dream of the world that you want to give to the second generation and third generation of India. Is this the path that you’re pursuing? Like the reason I’m asking this, all the teenagers marching on the street all over the world, “Friday’s for future”, accusing their parents that, you destroyed our life, you are totally responsible creating a world of global warming and you’re not paying any attention whatsoever. We will survive or not, is our life interest. Do you feel the same way that the young people are feeling or…?

Rahul Gandhi : See in India, in India there is a clear feeling that something has gone very wrong, that feeling is there in the people and particularly in the young people that something has gone wrong. Something is not working and they can also see, the thing that pinches in India the most is the difference between the rich and the poor, is just astronomical and it is so in your face that it is there in poor people’s face every day, every day, every day. So that is that disturbs people. And so, there is a sense that something new is required, a new imagination is required. And I think that what we are working on that as an opposition working on helping sort of flesh out what that new imagination would look like.

Prof. Muhammad Yunus : Same problem. Billionaires are growing here. You know where numbers of billionaires are growing and very strange in a country like Bangladesh or India have high growth rate of billionaires in numbers. Growing at a very fast rate. So that means that wealth has only one direction, grows in a very fast way if you can use all the political understanding among the people that we can get together. It disappears because of the anger it generates. I work hard. I don’t hear anything. I have to go miles to find my livelihood somewhere else and I can’t feed my family or feed my children, I have to stay away from my children, stay away from my family to make a living for myself and my family. So that anger kind of take over the whole society completely.

Rahul Gandhi : So, at the heart of what you’re saying, you’re questioning the concept of greed.

Prof. Muhammad Yunus : Everything that we have done is to fuel the greed and then we destroyed the whole world.

So this is the chance I said, Corona has given us a chance to reflect, to see how big bold decisions can be taken, these are bold decisions. In normal situation one will not pay attention to all these items. We are so busy making money. So I said coronavirus gave us a respite, gave us a window of thinking and we have a choice now whether we go to the terrible world which is going to destroy itself anyway, or we go someplace else which can build a new world where they will be no global warming, no wealth concentration, no unemployment, it is possible.

Rahul Gandhi : Well, thank you very much for your time and will not take anymore of it, but it’s always a pleasure. Any chance of you coming here.

Prof. Muhammad Yunus : Well let Corona go down.

Rahul Gandhi : When it goes down, we look forward to seeing you. All my love to everybody in the family and the organization.