The garment industry and microcredit have helped bring about a major social revolution in Bangladesh, empowering women in this predominantly Muslim nation. For many years I have been trying to address the issue of poverty through microcredit – small, collateral-free loans to the poor. The results have been most encouraging. In Bangladesh alone, more than 7 million borrowers, 97 percent of them women, have changed their lives and those of their families as a result of these loans.
Poverty and fertility rates are declining, child and maternal mortality rates are dropping, universal primary education now exists, girls outnumber boys in secondary schools in many areas, and women finally outlive men.
Meanwhile, the garment industry, which accounts for most of Bangladesh's exports, has provided jobs and training to 2 million young women, and religious sensitivities to their employment are being overcome. Instead of getting married and bearing children, young women are staying on the job, earning money to have a decent life. This has saved them from abuses that often befall young women, including trafficking, and has ensured a vastly improved life for them and their families.
New industries have grown up around the garment industry, and 15 million people are employed in related sectors. As a result, a new generation of girls is growing up in a Muslim society, creating a liberal, modern attitude among poor families.
But this labor-intensive, export-dependent sector will not continue to grow and thrive unless the United States reduces or eliminates duties on products from Bangladesh and other least-developed countries (LDCs), as it has done for economically depressed nations in Latin America, the Caribbean, and Africa.
Given their handicaps and slim profit margins, Bangladesh and such countries as Cambodia, Nepal, and Afghanistan need similar trade preferences to better compete against more advantaged nations. Duty-free access to the US market would provide a strong incentive to create new industries, resulting in many more jobs and higher living standards for millions of Asians.
What a difference that could make for Bangladesh, where nearly half the population lives below the poverty line!
Poverty, as I always point out, and as the Nobel Peace Prize Committee recognized, is a threat to both national and global peace. Poverty is a breeding ground for terrorism. Opening up trade opportunities for all LDCs would create new jobs and raise living standards, helping make the world safer. Families of working women would have their needs met and would not resort to violence.
A major step to reducing poverty is trade. America's duty structure has been unkind to trade with Bangladesh. Last year, Bangladesh paid half a billion dollars in duties on $3.3 billion in exports to the US – the same amount Britain paid on $54 billion in exports. The tariffs Bangladesh paid were equivalent to a tax of about $3.32 on each citizen of Bangladesh, whose per capita annual income is only $480.
Bangladesh is not seeking any special favors. It simply wants to be treated on a par with all other least developed countries.
Eliminating the tariffs on our products would be a win-win for the US. Bangladesh produces lower cost clothing such as T-shirts and nondesigner jeans, commodities American manufacturers long ago abandoned for more lucrative niches. Low-income Americans, for whom clothing is a major expenditure, would benefit from cheaper prices on our products.
If Bangladesh were allowed duty-free access to the American market, my best guess is that our export volume to the United States would double in five years or less. Four million young women would be employed by the garment industry alone, and wages and GNP would rise significantly. Exports of American cotton to Bangladesh would double, and other US exports, such as capital equipment, would rise.
Congress can help create the most dramatic poverty elimination results in human history. The world's poorest and most densely populated country, with Muslims making up 83 percent of its 150.45 million people, can come out gloriously in reducing the number of poor people by half by 2015. At the same time, the country can achieve the other seven millennium development goals. What a history to create!
It will be a great lesson for the world. With this lesson, we can move forward to create a poverty-free world, and put poverty ultimately in the poverty museums.
• Muhammad Yunus, a doctor of economics, received the 2006 Nobel Peace Prize for working to alleviate poverty with microcredit.