Post-Corona Reconstruction Program No Going Back by Muhammad Yunus

Post-Corona Reconstruction Program No Going Back by Muhammad Yunus

The extent of damage caused by the coronavirus pandemic is just mind boggling. However, despite this, it offers us an unparalleled opportunity.

Right now the whole world has to address a big question. It is not about how to get the economy running again. Luckily we know the answer. We have gathered good experiences of managing recovery processes. The big questions are: do we take the world back to where it was pre-pandemic? Or, do we redesign the world? The decision is entirely ours.

Needless to say that the pre-coronavirus world was not good to us. We were literally counting days to: when the planet would be unfit for human existence  through  climate catastrophe; how we fear mass unemployment as a result of artificial intelligence; and how wealth concentration might reach an explosive level. We were reminding each other that the 2020s would be the ‘last-chance’ decade, after which all our efforts would bring only marginal results, inadequate to save our planet.

Should we go back to that world? The choice is ours.

Coronavirus suddenly changed the context and calculus of the world. It has opened up audacious possibilities, not recognised before. Suddenly we are at the tabula rasa. We can go in any direction we want. What an unbelievable freedom of choice!

Before we restart the economy we must agree on what kind of economy we want. First and foremost, we have to agree that the economy is a means. It facilitates us to reach the goals set by us. It should not behave like a death trap designed by some divine power to punish us. We should not forget for a moment that it is a tool made by us. We must keep on designing and redesigning it until we arrive at the highest level of collective happiness.

If at any point we feel that it is not taking us where we want to go, we immediately know that there is something wrong with its current hardware or software. All we have to do is to fix it.  We cannot excuse ourselves by saying “Sorry we cannot achieve our goals  because our software or hardware will not let us do that”. That would be an unacceptably lame excuse. If we want to create a world of zero net carbon emission, we can build the right hardware and software for it. If we want a world of zero unemployment, we do the same. If we want a world where there will be no concentration of wealth, we do the same again. It is all about building the right hardware, and the right software. That power is in us. When human beings set their minds to getting something done, they just do it. Nothing is impossible for human beings.

The most exciting news is that the coronavirus crisis offers us almost limitless opportunities to make a fresh start. We can start designing our hardware and software on an almost clean screen.

Post-Coronavirus Redesigning Must be Based on Social and Environmental Consciousness

One simple unanimous global decision will help us tremendously: a clear instruction that we do not want to go back to where we are coming from. We do not want to jump back into the same frying pan in the name of recovery.

We should not even call it a ‘recovery’ programme. To make our purpose clear, we may call it a ‘reconstruction’ programme. Businesses will be made to play a key role to make it happen. The point of departure for a post-coronavirus reconstruction programme must be placing social and environmental consciousness firmly centre stage for all decision making. Governments must guarantee that not a single pound would be offered to anyone unless we are sure it will bring the  maximum social and environmental benefit to society, compared with all other options.

All reconstruction-related actions must lead to the creation of a socially, economically, and environmentally conscious economy for the country, as well as  for the world.

Time is NOW

We can start with ‘reconstruction’ packages for social consciousness driven plans and actions. We must design such plans right now, when we are in the thick of the crisis. When the crisis is over, there will be a stampede back to old ideas and old examples of bailout to rush the actions their way. Strong cases will be made to derail the new initiatives by saying these are untested policies. (When we proposed that the Olympic Games could be designed as a social business, opponents made the same arguments. Now, with increasing excitement, the Paris Olympics 2024 is being designed that way.) We have to get ready before the stampede backwards begins. The time is NOW.

Social Business

In this comprehensive reconstruction plan, I propose to give the central role to a new form of  business called ‘social  business’. It is a business created solely for solving people’s problems, without investors taking any personal profit, except to recoup their original investment. After the original investment is returned, all subsequent profits are ploughed back into the business.

Governments will have many opportunities to encourage, prioritise and open up space for social businesses to undertake major redesigning responsibilities. At the same time, governments should not expect social businesses to show up everywhere at the time and size they are needed. Governments must launch their programmes, such as taking care of those who are destitute and unemployed, through traditional welfare programmes, offering healthcare, reviving all essential services, and supporting all types of businesses where social  business options are slow to come forward.

To speed up the entry of social businesses, governments can create Social  Business Venture Capital Funds,  centrally and locally, and encourage the private sector, foundations,  financial institutions and investment funds to support them. Traditional companies can be encouraged to become social businesses themselves, have their own social businesses or create joint ventures with social business partners.

Under the rebuilding programme governments can finance social businesses to buy up companies, and tie-up with companies in need of support to transform them into social businesses. Central banks can allow social businesses, like other businesses, to receive financing from financial institutions via the stock market.

There will be so many opportunities arising during the rebuilding process; governments should involve as many social business actors as possible.

Who Are the Social Business Investors?

Who are the social business investors? Where do we find them?

They are everywhere. We do not see them because our existing economic textbooks do not recognise their existence.  As a result, our eyes are not trained to see them. Only recently, economics courses have included some discussions on topics like social business, social entrepreneurship, impact investment, non-profit organisations etc. as side issues inspired by the global admiration for Grameen Bank and other community-driven microcredit initiatives.

As long as economics remains a science for profit maximisation, we cannot rely entirely on it for the reconstruction programme, which is based on social and environmental consciousness.  The whole strategy would be to enlarge the proportion of social business in the total economy as the economy grows.

Success of social business will be visible when not only it grows into a larger percentage of the economy, but also with rapid growth in the numbers of entrepreneurs doing both types of business. This will signal the beginning of a social and environmentally conscious economy.

As soon as government policy starts recognising social business entrepreneurs and investors,  such entrepreneurs and investors will come forward enthusiastically to play the important social role demanded by this historical opportunity. Social business entrepreneurs are not members of a small do-gooder community. This is a significant global eco-system which includes giant multinational companies, big social business funds, many talented CEOs, corporate bodies, foundations, and trusts, with many years of experiences in financing and running global and local social businesses.

When the concept and the experiences of social businesses start receiving government attention, many hardcore personal profit makers will be happy to bring out the unexplored part of their talent to become successful social business entrepreneurs and play very valuable social roles at a time of social and economic crises like our current climate crisis, unemployment crisis and wealth concentration crisis.

People Are Born as Entrepreneurs, Not as Job-Seekers

The reconstruction programme must break a traditional division of work between citizens and the government. It is taken for granted that the citizen’s role is to take care of their families and pay taxes; it is the responsibility of the government (and to a limited extent the non-profit sector) to take care of all collective problems, like climate, jobs, healthcare, education, water, and so on. The reconstruction programme should break this wall of separation and encourage all citizens to come forward and show their talent as problem-solvers by creating social businesses. Their strength is not in the size of their initiatives, but in their number. Each small initiative multiplied by a big number turns out to be a significant national action.

One problem that the social business entrepreneurs can immediately address will be that of unemployment created by the collapse of the economy.  Social business investors can get busy with creating social businesses to create jobs for the unemployed. They can also open up the option of transforming the unemployed into entrepreneurs, and demonstrating that human beings are born as entrepreneurs, not as job-seekers. Social businesses can engage themselves in creating a robust health system in collaboration with government systems.

A social business investor does not necessarily have to be an individual. They can be institutions, such as, investment funds, foundations, trusts, social business management companies. Many of these institutions know very well how to work in friendly ways with the traditional owners of the companies. Out of the desperation and urgency of the post-coronavirus situation, a right call from a government can create a surge of activities which were never known before. This will be the test of leadership; to show how a world can be inspired to be re-born in completely unknown ways, coming from the youth, the middle aged, and older people.

We Will Have No Place to Hide

If we fail to undertake a social and environmental consciousness driven post-coronavirus  programme we will be heading for a catastrophe that is many times worse than what the coronavirus brought. We can hide in our homes from coronavirus, but if we fail to address the deteriorating global issues, we will not have anywhere to hide from the anger of Mother Nature and the angry masses, the citizens of the world.

Professor Muhammad Yunus
Nobel Peace Laureate
Chancellor Emeritus, Glasgow Caledonian University