Muhammad Yunus: Eradicating poverty in Central and Eastern Europe
Entrepreneurial spirit will combat poverty and social exclusion in Central and Eastern Europe. Around 1,000 participants took part in the Social Business Tour 2010 kick off on 11 and 12 May in the Twin City Vienna-Bratislava. The programme featured all-day Social Business Labs as well as a major Social Business networking event on the evening of 12 May in Vienna.
Here, Nobel Peace Prize Laureate Muhammad Yunus, founder of the Grameen Bank and patron of the tour presented his Social Business concept in dialogue with Andreas Treichl (Chairman of the Board of ERSTE Foundation), Rudolf Hundstorfer (Federal Minister for Labour, Social Affairs, and Consumer Protection, Republic of Austria), Emilia Krsikova (Federal Secretary for Labour, Social Affairs, and Family), Hans Reitz (founder of The Grameen Creative Lab), as well as young people from Bratislava and Vienna.
Before things got underway, the Social Business Tour 2010 initiators held a press conference and explained why they want to spread this concept in Central and Eastern Europe. Andreas Treichl emphasized that the Erste Bank began 190 years ago as a Social Business, as an association savings bank. “Apart from that, we believe in Central and Eastern Europe, also in difficult times. Because the people there have an enormous amount of energy, and everyone has the will to change, to improve their own lives.” Treichl announced that the Erste Group plans to make up to 10 million euros available for Social Enterprise Financing in the region which will be supervised by the Social Banking Platform of Erste Group, good.bee. Collaboration with organisations such as Ashoka and Bonventure are being discussed. “That would thereby create one of the most comprehensive and highly funded Social Business support systems in the world.”
Social Enterprise Financing should contribute to sustainable development of social businesses in the region once the Social Business Tour is over, as should the Social Business founder centers, which will be created during and after the tour. There, social entrepreneurs receive support in the form of know-how. In addition, voluntary support teams from the banks of the Erste Group and from other companies, under the guidance of the good.bee team, will offer social entrepreneurs help in setting up their companies. The ERSTE Foundation Fellowships, in cooperation with the Social Business organization Ashoka, have been in existence since 2010. Through these, five fellows from the Central and Eastern European region are able to pursue their idea for establishing a Social Business for three years. The ERSTE Foundation makes available 100,000 euros per year for this. In conclusion, Andreas Treichl commented that in Central and Eastern Europe there is still a tendency to trust in the state alone when a society has social problems. With Social Business, a bridge can be built to the private economy and civil society.
Federal Minister Rudolf Hundstorfer takes up this point, too. The Minister of Labour and Social Affairs for the Republic of Austria asked if Social Business might possibly be a sensible expansion of social policy and “[w]hat is it actually that makes social business so interesting? Social business is so attractive because close links are established between social values and the market economy in an ambitious effort.” It makes sense for the Austrian Federal Minister for Social Affairs and Labour—especially in the European Year for Combating Poverty and Social Exclusion—to disseminate Prof. Yunus’ ideas and to support them, because it is a fact that through micro financing and social business many people in various states gain higher prosperity. Federal Minister Hundstorfer emphasized that the Austrian social state is greatly challenged in times of economic crisis. “In Austria, extensive transfer payments, such as unemployment, emergency aid, social aid, family subsidies, and pensions sustain steady consumer spending. This makes it possible to guarantee prosperity, productivity, and social peace. The Social Business model, which rests on two pillars—economy and social affairs—fosters the establishment of social businesses, among other ways, through the issuing of micro-credits. Since 1 May 2010, micro-credits have been issued by the Federal Ministry for Labour, Social Affairs, and Consumer Protections in an effort to promote the founding of small businesses. In 2009, there were 8,400 people involved in business establishment support programs; 5,000 succeeded in establishing businesses. In the years 2010– 2014, micro-credits should enable the establishment of an additional 250 small businesses and create 560 new jobs.”
“The Social Business Tour will encourage the establishment of new Social Business companies. This is not only an important step toward social equity and sustainability in Europe, but also a contribution to our battle to eradicate poverty globally by 2030,” says Muhammad Yunus in his talk. “The Social Business Tour is the start of a comprehensive movement with the goal of completely eradicating poverty in Central and Eastern Europe.” The history of the Grameen Bank has proven that we should never stop thinking in great dimensions and starting out in small ones, in helping every single person out of poverty. “I am convinced that we can create a world without poverty, as it is not the poor who cause poverty.”
Hans Reitz, founder of The Grameen Creative Lab, sees opportunities for the region to become a role model for others: “With Social Business, eastern Europe has the possibility to become a forerunner in Europe in the solution of social problems.” Social Business can include all classes and groups in society in the positive development of the countries of eastern Europe, although social entrepreneurship always aims especially at giving the poorest of the poor the possibility to free themselves from poverty. The Social Business Tour and the idea competition in conjunction with it, should especially promote entrepreneurial potential among the younger members of the population.
The Social Business Idea 2010 contest
“The Social Business Idea 2010” contest is taking place parallel to the tour. In six national preliminaries and a European finale, sought are innovative business ideas that are suitable for solving social problems in the countries of Central and Eastern Europe on a permanent basis. All information about The Social Business Tour 2010 and information on participation in The Social Business Idea 2010 contest can be found on the tour website: www.socialbusinesstour.com
After Vienna-Bratislava, the Social Business Tour 2010 will provide information about the Social Business concept in Budapest (beginning of July), Belgrade (end of September), Prague (early October) and Bucharest (28 and 29 October) to numerous social groups (entrepreneurs and investors, as well as foundations and NGOs, representatives from the public sector and people involved in culture, arts, and the media) and work together on developing ideas for Social Business models to solve region-specific social problems. Projects and initiatives developed in this context will be supported and promoted beyond the end of the tour.
The idea for the Social Business Tour 2010 was born when Mohammd Yunus visited Vienna in May 2009. There, the founder of the Grameen Bank gathered information especially about the Die Zweite Sparkasse and good.bee, the two Social Banking projects from the ERSTE Fundation and Erste Group.
The Social Business Tour 2010 is an initiative from the ERSTE Foundation; Erste Group; good.bee; the Federal Ministry of Labour, Social Affairs, and Consumer Protection, Republic of Austria; and the The Grameen Creative Lab, as part of the 2010 European Year for Combating Poverty and Social Exclusion. Slovenská Sporiteľňa is partner and sponsor of the Social Business Days in Bratislava and Vienna.
Andreas Treichl, Chairman of the Board of ERSTE Foundation, and Rudolf Hundstorfer, Federal Minister for Labour, Social Affairs, and Consumer Protection, of the Republic of Austria, welcome Nobel Peace Prize Laureate Muhammad Yunus, founder of the Grameen Bank and patron of The Social Business Tour 2010.
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photo: Anna Rauchenberger, copyright: ERSTE Foundation
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Social Business – background
Social exclusion, destitution, poverty: not only people in the developing world and emerging countries have these problems. They are also increasingly prevalent in Central and Eastern Europe. According to a recent statement by the EU commission, 17 percent of Europeans don’t have the means to meet their most basic needs. Social Business, an economic concept developed by Prof. Yunus, has enormous potential to improve the living conditions of disadvantaged people and positively shape the necessary social change in society in Central and Eastern Europe, too. Social Business stands for innovative business models aimed at tackling social problems with entrepreneurial means—to further these business purposes, all profits are reinvested, on principle, rather than being distributed. Grameen Bank in Bangladesh, which offers micro-credits to the poor, serves as a role model for the Social Business concept and has inspired numerous projects in various business areas.