19th July 2011

Yunus: ‘Job creation is the solution to poverty’

In the Guardian today Muhammed Yunus has said ‘Job creation is the solution to poverty’. (The Guardian: Yunus). At Hathay Bunano we couldn’t agree more. I was delighted to read this article this morning where Yunus so clearly advocates job creation as a solution to poverty but also goes on to say ‘Loans should only be given to fund enterprises. They mustn’t ever be used for ‘consumption smoothing’ or how can people pay back the loans? It has to be about income generation.’ It reminds me very much of an article I wrote for the Daily Star newspaper in Bangladesh back in February 2009 (Daily Star: Business to fight poverty) at a time when micro-finance was still very much seen as a silver bullet regardless of how the recipients were using it.

I first met Muhammed Yunus about 6 years ago, not long after Hathay Bunano had started. I had always held him in very high regard and was delighted to be able to spend some time discussing ideas with him. Interestingly Yunus’ opinion back then was just the same as he has expressed in the article in the Guardian today and yet it was of some concern to both of us that this was not the story that always came out. The world wanted a ‘silver bullet’. In the article he claims the media built it up, but I have always thought that it was not just the media but also the international development agencies who were so keen for a quick fix with low overheads. Development projects generally run for 18 months or 3 years and in rare cases only a little longer and metrics (measuring the success or failure of the project ) start earlier than that and so there is this compulsion within the development arena to demonstrate success in an unrealistically short time frame. I remember once reading that Stella McCartney had said that it takes 10 years for a fashion brand to become profitable. Whilst we see these days dot.com businesses propelled to stellar heights of company value very quickly, in reality it takes time to grow a profitable business and this is equally true when growing a business in a developing country in challenging conditions. The push for quick success changed the headline.

I agree entirely with Yunus that job creation is the solution to poverty. At Hathay Bunano we make products by hand because it takes longer than making them by machine. We are thereby creating employment without excessively contributing to consumerism and the ‘throw away’ culture. Pebble toys are made to last through this generation and beyond. We like to think that they will be the toy that families will keep for the next generation and every Pebble toy is creating much needed rural and local employment for women in Bangladesh: creating employment that is within a few minutes walk of women’s homes and helping to not only support families but to keep them together and stem the tide of economic migration.

It’s great to read Yunus’ ideas so clearly and accurately written.

Samantha