Three core goals for new BRICS bank

By Muhammad Yunus Source:Global Times Published: 2015-7-9 22:43:01

The New Development Bank (NDB) is one of the highlights of this year's BRICS summit in Ufa, Russia. The world's newest multilateral development bank will have $100 billion as initial capital to fund infrastructure and sustainable development projects both in their own countries as well as elsewhere.

Obviously, the NDB should not become another World Bank which finances the same types of projects in the same countries, using the same tools and mindset. At the same time, its purpose should not simply be to act as a symbol of emerging countries' desire to show off their financial and political power. The reason for its creation must be very substantive.

The NDB should be based on entirely new objectives, to be carried out with new strategies. It would be easy for the NDB to fall into the same track as the World Bank since it is in the same business. But the NDB must resist this from day one.

I propose three core objectives for the NDB. The primary objectives of the NDB should be to achieve three zeros by 2050: zero poverty, zero unemployment, and zero net carbon emission.

The NDB could achieve these goals using four basic strategies.

The first strategy would be to unleash the creative power and commitment of the new generation of youth.

The second strategy would be to focus on technological innovations. Technology today is under the command of money-makers and war-makers. Socially committed drivers must take charge of technology. They are invisible today. Combining the power of the youth with that of technology will create an unshakeable force.

This brings us to the third strategy: build up social businesses to mobilize their creative power to solve long-standing and complex social, economic, and environmental problems.

Social business is a new variety of business which delinks itself from a profit motive. They are mission driven-businesses, and non-dividend companies exclusively devoted to solving human problems. After the company makes profit, the investor recoups his or her investment money but does not take any profit after that. Additional profits made are ploughed back into the business to expand and improve it.

Conventional businesses cannot solve social problems. Other actors such as the state and private charities may be unsustainable and inefficient. Social businesses are sustainable, efficient, replicable and transferable.

I have been creating and promoting this type of business around the world. I believe that the social business model should be the center-piece of the NDB's institutional structure and policy package. It is a model that can easily be replicated across a number of contexts.

Unemployment can be brought down to zero through social business initiatives. Unemployment is the product of a flawed and theoretical interpretation of human beings. Human beings are not job-seekers, they are entrepreneurs by birth. Entrepreneurship is in the DNA of human beings. They are go-getters and problem-solvers. Social businesses can turn the unemployed into entrepreneurs. We are doing that in Bangladesh. NDB can adopt this as its prime program.

Once the NDB creates a new window for financing and promoting social businesses it will attract the young, old, men, women, individuals and organizations, with social business ideas. It can encourage each conventional business to undertake social businesses alongside their main business activities.

The NDB could create country-level social business funds as joint ventures with local partners. It could create provincial level social business funds in which it holds a minor equity with majority equity coming from local investors.

Ensuring financial services to the poor, healthcare to the poor and hard to reach people can be done through creating social businesses.

While the NDB will undertake many types of infrastructure projects, it should give serious consideration to the ownership and maintenance of these infrastructures. We have now examples of major infrastructures being owned by money-makers. In the old days, this was the exclusive preserve of governments. Apart from government ownership and commercial ownership, there is now a new type of ownership: ownership by social businesses. From the perspective of its users, ownership by social businesses will be much more satisfying than other two alternatives.

Finally, human rights and good governance should lie at the heart of the NDB's operations.

At its inception, the NDB has the opportunity to create the right objectives and appropriate strategies for their implementation.

I wish the NDB every success in redesigning the world to make it sustainable.

The author is a Nobel Peace Prize winning economist and Grameen Bank founder.

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