Many pressing problems of rich as well as poor countries, such as poverty and unemployment, can be solved by setting up 'social-business' ventures, said Prof Mohammad Yunus, a Bangladeshi economist who was awarded the Nobel Peace Prize in 2006 along with Grameen Bank, that he founded.
Prof Yunus was in Muscat to deliver a speech on 'social business' at the Second Entrepreneurs' Organization (EO) Majlis 2013 organised by the EO Oman chapter from February 21-23.
Founded in 1987, EO is a global business network of over 8,700 business owners with chapters around the world.
Speaking to Muscat Daily on the sidelines of the EO Majlis, Prof Yunus said that social businesses would have a big impact in terms of solving pressing problems, especially poverty and unemployment, across the world.
Yunus, who is the father of micro-finance and the social-business concept, defines social business as a non-loss, non-dividend company model dedicated entirely to solving human problems.
He said, “In philanthropy, every time you want to do something you need to invest fresh money but in social business the money re-circulates and becomes sustainable. In social business, all profits are invested back into a venture for expansion and improvement and do not go to investors. The investor gets his or her investment money back over time, but never receives dividends beyond that amount.”
When asked whether the social-business model can be replicated in Oman, he said, “Social business is applicable to every situation in any country. For example, Germany is using social businesses to solve their unemployment-, old age-, single mothers-, and drug-related problems.
"So you have these problems everywhere. Unemployment is a common issue across the globe whether you are in developed or poor countries,” Prof Yunus added.
He said that he would be very happy to offer services to Omani companies if they want to set up social-business ventures.
“However, there is a question as to why people should get into social businesses and why they should give away their money without making a profit?
"I say billions of dollars are given away every year as donations and charity around the world. So why not use this money to create social businesses to make the charity or donations sustainable,” the Nobel laureate added.
When asked about his view on economic progress and unemployment in the Gulf region, Prof Yunus said, “This is a region which is floating on resources. But the mismatch between resources and quality of life of people should be resolved.”
He said that government charities in the region will not solve issues, but investing in social businesses may have a big impact on resolving social problems.
“Charity never solves problems. It can only postpone the problem or keep it simmering. But creating employment and alleviating poverty need big changes and social businesses can make that happen in a sustainable way,” he said.
“The Arab Spring is an expression of dissatisfaction and anger. So if today you sense anger then tomorrow you may face an outburst. So before this happens we should be aware that there is no explanation, whatsoever, to why the quality of life should be different from what is mandated by the resources that we have. That is where I raise the issue and say that social businesses can solve these problems,” added Prof Yunus.