Obama’s No-Win Nobel

Either there hasn’t been much peace in the world this year or the 2009 Nobel Peace Prize committee is stacked with American Republicans. Because those scenarios would appear to be the only ones that make sense of Obama’s award. The president seemed almost embarrassed about it today and is unlikely to want to thank the Oslo committee for the honour. Domestically, many will see it as proof Obama is an unreconstructed European socialist. And coming so early in his presidency, it is only likely to undo the massive goodwill towards him in most parts of the globe. (photo by jlowe4obama)

It is an odd award in many respects, not least because of the timing. The decision-making for this year’s prize began in September 2008 when the committee invited nominations for the 2009 award. At the time Obama was on the hustings so was unlikely to have been in the frame at this stage. The nominations deadline closed in February so we must assume he had been nominated barely a few weeks after assuming the presidency.

This means the decision of the Oslo Nobel committee to award him the 2009 Peace Prize can only be for his intentions rather than his actions. According to the official communiqué, Obama won the award “for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples”. The committee said President Obama has created a new climate of multilateral diplomacy in international politics with emphasis on the role of the UN and other international institutions. But the most obvious translation is he won it for not being George W. Bush.

Because he could not have won for his mixed foreign policy record. He ordered the closure of Guantanamo Bay prison (though that is proving more difficult than he thought) and prohibited the use of torture (again proving difficult to implement in practice). He is proceeding with a plan to exit Iraq but is increasing US involvement in Afghanistan and Pakistan. He has announced a strategy to address the international nuclear threat (but hasn’t reduced the US’s nuclear arsenal), and has established a new dialogue with China. Much of this is laudable, but hardly prize-winning.

Five Thirty-Eight has come up with a laundry list of other justifications even while admitting they are “a bit tenuous”. It praised his speech at the UN and said he has long been an advocate of non-proliferation. He has also taken a tough stance on climate change while also taking a softly-softly approach on Iran. It also praised the diplomacy of the re-elevation of the US Ambassador to the UN to a cabinet level post.

Obama has a lot of goodwill to work with - Crooked Timber calls him “global prozac”. He is a wonderful orator and may yet turn out to be the greatest US president in fifty years but he has a long way to go yet. Taking the lead at Copenhagen in December would be a good start. But he still has his training wheels on for now. Obama should follow the advice of both the right (former Bush UN ambassador John Bolton) and the left (Michael Tomasky in The Guardian) and decline the Prize.

Yunus win the peace prize

This year’s Nobel Peace Prize has gone to Muhammad Yunus and his Grameen Bank. The 87th naming of the award was announced yesterday in Oslo. Yunus and the bank won the award for their work in advancing economic and social opportunities for the poor, particularly women. The committee cited their efforts to help “create economic and social development from below”.

The prize is shared between Yunus and the bank. Yunus is a Bangladeshi economist who has been praised for his novel method of “microcredit” which has helped poor women advance their lives and escape from poverty. Microcredit is the extension of small loans typically from $60 to $140 to entrepreneurs too poor to qualify for traditional bank loans. He founded the Grameen Bank with a charter to help the “poorest of the poor” living without any capital in crowded rural Bangladesh. It has 6.6 million borrowers, 97% of which are women. It provides services in 70,000 villages across the country.

Yunus and the bank will share the prize of 10 million Norwegian kronor (approx $2 million) as well as the gold medal and associated diploma. Yunus told the Nobel Foundation by phone: “I’m absolutely delighted. I cannot believe it has really happened. Everyone was telling me that I would get the prize but it came as a surprise. It is fantastic news for the people that have supported us”.

Yunus won it ahead of this year’s favourite Finnish president Martii Ahtisaari who was heavily backed following his efforts to secure a 2005 peace deal between Indonesia and its separatist Sumatran province Aceh. The five member committee would not comment on who else was considered for the award except to state it received 191 nominations for the award. The committee chair Ole Danbolt Mjoes said Yunus’s efforts had clear results. He said “we are saying microcredit is an important contribution that cannot fix everything, but is a big help.” He went on to compliment Yunus saying he was creative and “his head is in the right place”.

The 65 year old economist was born in the rural part of Chittagong province. In his school years he was an active boy scout and travelled abroad to scout jamborees. He completed an MA in economics in Dhaka University in 1961 and went to Vanderbilt University in Nashville, Tennessee to gain his doctorate. He stayed on there to be an assistant professor of economics at Middle Tennessee State University before returning home to newly independent Bangladesh to become a full professor of economics at Chittagong University. The country underwent an extreme famine in 1974 in which thousands died. "We tried to ignore it," Yunus told PBS, "But then skeleton-like people began showing up in the capital, Dhaka. Nothing in the economic theories I taught reflected the life around me. How could I go on telling my students make believe stories in the name of economics? I needed to run away from these theories and from my textbooks and discover the real-life economics of a poor person's existence." Yunus moved to the village of Jobra to study the poor. Yunus found that very small loans could make a significant difference in a poor person's ability to survive. He established a rural economic program as a research project. His first loan consisted of $27 of his own money, which he lent to women in a village near Chittagong to make bamboo furniture.

In 1976, Yunus founded the Grameen Bank (which means "of rural area" in Bengali). The bank uses a system of "solidarity groups" to ensure repayment. These groups apply together for loans and its members act as co-guarantors of repayment. With the sponsorship of the central bank of the country and support of the nationalised commercial bank, the bank grew to service other areas around the country. In addition to microcredit, it offers housing loans as well as financing for fisheries and irrigation projects, venture capital, textiles as well as traditional bank services. The Grameen microcredit model has spread to 23 countries. Many micro financing projects follow Yunus’s emphasis on lending specifically to women. Grameen’s stated goal is to reverse the age-old vicious circle of "low income, low saving & low investment", into the cycle of "low income, injection of credit, investment, more income, more savings, more investment, more income". In 1983, the project was transformed into an independent bank by government legislation. Now Grameen is owned by the rural poor whom it serves. Bank borrowers own 90% of its shares, while the remaining 10% is owned by the government.