INDIVIDUAL ASSIGNMENT:

A WORLD OF THREE ZEROS

PREPARED BY:

Ayesha Feroz Roza PBS20301323

ECO7101 BUSINESS ECONOMICS

DR. IDA MD. YASIN

PUTRA BUSINESS SCHOOL, UNIVERSITI PUTRA MALAYSIA

27TH JUNE 2021

Table of Contents
CAPITALISM: AN INADEQUATE SYSTEM............................................................................................................... 1
THREE ZEROS OF WORLD.................................................................................................................................... 1
ZERO POVERTY............................................................................................................................................................ 1
ZERO UNEMPLOYMENT................................................................................................................................................. 2
ZERO NET CARBON.......................................................................................................................................................3
MEANS OF TRANSFORMATION TO BETTER FUTURE............................................................................................. 4
YOUTH EMPOWERMENT WITH SOCIAL BUSINESS................................................................................................................4
ERADICATE CORRUPTION............................................................................................................................................... 4
REFORM LEGAL AND FINANCIAL SYSTEMS.........................................................................................................................4
RECOMMENDATIONS & CONCLUSION................................................................................................................. 5
REFERENCE......................................................................................................................................................... 7
 Capitalism: An Inadequate System
Over the past decades, the world is lurching from one crisis to another: financial disasters,
famines, energy shortages, environmental catastrophes, military conflicts, floods of refugees,
rising political instability. But, unfortunately, neither Adam Smith's "invisible hand" nor Thomas
Piketty's contention of progressive taxation served to remedy these predicaments. In the first
part, the writer criticizes capitalism, a crucial tool behind the world's skyrocketing inequality. A
poll conducted by Harvard University in 2016 depicted that 42% stood with capitalism while
51% was against it. It is a shocking claim that the world's 90 per cent wealth is occupied by a
meagre of the world's population. Moreover, the capitalist system circulates the notion of
maximizing profit rather than maximizing collective profit. Thus, the writer disapproves of the
neoclassical theory where selfishness is granted as the highest virtue of Capitalist man.

Three Zeros of World

Zero Poverty
Further, he condemns Gross Domestic Product (GDP), the economic growth measurement,
which fails to capture the real world's situation. He stated that "we should explore ways to
calculate a new measurement of GDP that "nets out" the harms done to human beings". The
quotation indicates that economic growth's negative impact on people's health and environment
is utterly shunned out. Even low-income people in the developed nations suffer from the same
crisis: lack of institutional services, lack of clean drinking water, unhygienic sanitary facilities,
lack of health care, inadequate education, substandard housing, no access to energy, neglect old
age, and many more.

As a means to address capitalism problems, Muhammad Yunus introduced Grameen Bank in

Bangladesh to alleviate poverty. As a result, starting from 2006, 'social business' came to world
recognition and laureated the writer with Noble Prize. He defines social business as "a non-
dividend company dedicated to solving human problems". Yunus Social Business (YSB)
emergence is about sustainably unravelling human and economic problems. The social business
concept proclaims that as more people will be concerned about economic dilemmas, the unequal
wealth concentration would be reversed back as more people take measures towards it. The

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social business offers the most significant social return where the rate of return from investment
might be zero. Many universities around the globe welcomed the perception of social business
and added it as a course to their academic programs, forming Yunus Social Business Centres
(YSBCs).

Zero Unemployment
The second part highlighted the three ever-challenging issues of the 21 st century: poverty,
unemployment and carbon emission. Yunus blames the economic structure for it "For too long,
we have tolerated the persistence of poverty, unemployment, and environmental destruction, as if
these are natural calamities completely out of human control, or, at best, unavoidable cost of
economic growth. They are not. They are the failure of our economic system". The mishandling
of resources supports his statement during the food crisis in 2008, which led to a staggering
surge in prices of staple foods causing food riots, food shortage and malnutrition around the
globe. The economic system contributed to the surfacing of poverty as resources inclined
profoundly towards the people on top (See Lorenz Curve Below for Visual Depiction). He
described poor people as 'bonsai tree' who fail to obtain their desired happiness from the current
monopolistic economic system. Cummulative share of income %
100%
Lorenz Curve
Line of Equality

60%

10%
0% 40% 90% 100%

% Households by income distribution

Figure: Lorenz Curve

Also, in the COVID pandemic, primarily low and middle earners are hampered drastically;
millions are losing their jobs, engraving the severity of poverty. More ripple crisis is predicted to
face in the future. With the concept of social business, Yunus is inspiring youths to become
entrepreneurs rather than job seekers. He contemplates supporting entrepreneurship would help
eradicate the fatal issue of fresh graduates being unemployed. Yunus creatively established

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Microfinance and Nobin Program to spark the impulse among young Bangladeshi leaders to
utilize their talents appropriately.

Zero Net Carbon

Yunus also mentioned the pragmatic roles that technology has played to uplift the issues
discussed above. For example, he initiated the telecommunication company Grameen Phone to
provide villagers with mobile phones to generate income acting as 'telephone ladies' and gather
information by linking to the outside world. Additionally, Grameen Shakti initiation granted
more than 1.5 million homes in rural areas access to renewable electricity using solar energy
systems. Grameen Shakti also sells improvised stoves diminishing pollution and fuel waste. The
mixture of ICT and social business ensued millions of individuals, including women, to lift
themselves out of poverty through mico-entrepreneurship and microcredit. One such example is
the multiplying power of the microfinance platform Kiva, Matt Flannery, which connects
entrepreneurs who need capital with money to spare. The combination of networking and data-
crunching management allowed lending money across vast geographic distances by searching on
Kiva.

Yunus raised concerns about Bangladesh decimating natural resources to boost economic
activity and meet the large population's needs (Shown in Kuznets Curve). Growth without proper
regulations generated consequential pollution leading to floods, intense heat waves and
respiratory diseases. Further, he disclosed the intimidating fact sea level rising by 3-feet by the
end of the 21st century, where Bangladesh will be among the first victims. Therefore, he
accentuated the urgency of zero net carbon emission of the three zeros. He wants to raise
awareness by directing towards two environmentally threatening megaprojects of Bangladesh:
the Rampal power plant and nuclear power plant. These environmental crimes committed against
the poor result from global inequality and rampant pollution makes it even harder for emerging
countries to lift themselves out of poverty.
Level of Economic
Degradation/Co2
Emission Turning Point

Scale Effect Technological

Effect

Structural Effect

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 Growth per Capita ( Economic Growth)

Figure: Environmental Kuznets Curve (EKC)

Means of Transformation to Better Future
Youth Empowerment with Social Business
Even though the world is in turmoil, Muhammad Yunus is yet optimistic that humans can uplift
from these circumstances. He pointed out international corporations attaining triumph, and one
of such stories is the Millennium Summit of United Nations (UN) acquiring 8-MDGs
(Millennium Development Goals) by 2015, set in 2000. For instance, Bangladesh succeeded to
minimize the poverty rate to 29 per cent by 2015, including gender parity, reduction in infant and
child mortality and drastic advancement in maternal health care. He believes that the three big
goals: zero poverty, zero unemployment and zero net carbon emission, do not conflict. Instead,
he suggested that these goals complement each other only if sustainable growth is pursued.

Eradicate Corruption
Moreover, he believes that good governance, human rights, and economic development are
interconnected; achieving all these honours the principles of freedom, justice and integrity in
society. To annihilate fraudulent elections, he emphasized appropriate developing technology to
secure credible elections, and the UN has developed one such unbiased election grading system.
On the other hand, corruption is one of the most considerable threats to good governance, which
is difficult to wipe out. Therefore, Yunus supported the watchdogs of global corruption like
Transparency International (TI), which has been doing a commendable job by informing the
public about corruption using TI's Corruption Perceptions Index.

Reform Legal and Financial Systems

In addition, Yunus also examined reforming the current legal and financial system. During times
of crisis, the banking industry experiences severe losses, as seen in the Great Recession and now
in the COVID-19 pandemic. The breakdown of banks topples downs the whole economy. The
writer, here, proposes creating a new legal and financial sector for a selfless economy where the
social business would be encouraged to flourish based upon trust, like Grameen Bank, rather
than a formal collateral requirement.

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Overall, Yunus proposed redesigning the economic system, that the old way of fighting poverty
and unemployment is not an appropriate tool to minimize the issue. The current structure of
economic theory does not allow the selfless dimension pledged solely to self-interest driven
businesses. Yunus is determined that social enterprise can address all the problems left behind by
the capitalist profit-driven economy while correcting their excesses.

Recommendations & Conclusion

I agree that social businesses are dedicated to solving human needs, whereas the main objectives
of the present conventional business are acquiring the highest investment return. The writer's
aspiration of flickering juvenile to turn entrepreneur has been observed worldwide, which
assisted humanity in various ways. However, considering the common psychology of
entrepreneurs, it would not be unreasonable to question whether the "social passion" is robust
enough as a motivational factor to prompt an entrepreneur to go for a social business. It is also
difficult to measure the non-monetary objectives of social business as no concrete form of
performance measurement tool has been developed. Furthermore, one can portray the social
business as a promotional tool for their profit-maximizing business. On the other hand, as
investors have no individual interest, there might arise mismanagement on the part of
entrepreneurs.

The amount of carbon emission is escalating rapidly since the era of Industrialization, which is
significantly affecting the global average temperature to rise and severely disrupting the
ecosystem balance. Therefore, apart from social business, economies need to promote renewable
energy to tackle global carbon emission. As depicted in the figure of EKC above, the structural
effect stage is the crucial point for individual countries to deviate from traditional energy sources
to renewable sources to mitigate pollution.

Further, by shifting from linear economy to circular economy, economies can switch the finite
resource use. Government energy policies can accelerate the shifting process and determine its
developing direction. However, government energy policies should also be realistic and
consistent with resource endowments and technological capability. Also, the government
requires necessary financial support for renewable energy infrastructure because the costs of
renewable energy development are costly for many small-medium private firms to bear.

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Although, as Muhammad Yunus mentioned, microcredit reduces extreme poverty, this program
benefits the moderately poor rather than the extreme poor. Microfinance institutions generally
target rural women for lending credit. The male members of their family forcefully collect the
loan from them and use it for their intended purpose. The women have nothing to do because of
their socio-economic condition. Many studies even showed that women take loans from a couple
of microfinance enterprises to pay off their previous loans.

I yearn for Yunus's conceptions to put forward in reality, ' HEAL THE WORLD' and 'MAKE IT
A BETTER PLACE', similar to Mark Zuckerberg's donation of 99 per cent of his Facebooks
shares, hoping for a better world for his daughter. Ultimately, I am reminded of a native
American proverb devouring this book:

"We did not inherit the earth from our ancestors. We borrow it from our future
children."

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 Reference
A. (2021, January 13). A World of three Zeros: The New Economy of Zero Poverty, Zero
Unemployment, and Zero Carbon Emissions. Poresh Research & Studies Organization.
https://www.porseshresearch.org/yunus-world-of-3-zeros-review/

Ahmed, Z., Pervez, M., & Jayed, B. H. (n.d.) A comparative study on the role of microcredit and
social business in sustainable poverty reduction.

Hoque, S. (2014). Social Business: A Revolutionary Idea in the Field of Poverty Alleviation.
IIUC Studies, 8, 81–94. https://doi.org/10.3329/iiucs.v8i0.20404

Yao, S., Zhang, S., & Zhang, X. (2019). Renewable energy, carbon emission and economic
growth: A revised environmental Kuznets Curve perspective. Journal of Cleaner
Production, 235, 1338–1352. https://doi.org/10.1016/j.jclepro.2019.07.069

Yunus, M. (2018). A World of Three Zeros: The New Economics of Zero Poverty, Zero
Unemployment, and Zero Net Carbon Emissions (Reprint ed.). PublicAffairs.

1840 words (Excluding Reference)

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