Poverty Is Not a Natural Condition
A message by the Nobel laureate Mohammed Yunus with concrete policy proposals to inform the first EU anti-poverty strategy.
Chief Adviser Mohammed Yunus delivered this message at the event “The EU’s Anti-Poverty Strategy: An Evaluation and Next Steps,” co-organised by the Institute for European Policymaking at Bocconi and the European Commission, on October 20 at Bocconi University in Milan.
Good day and warm greetings to you all. It is an honour to be part of this important conversation. I commend the European Union for its bold leadership in launching a comprehensive strategy to combat poverty.
This initiative reflects a profound understanding that poverty is not just a matter of temporary hardship; it is a structural issue that requires long-term and systematic solutions. Even rich countries experience a significant incidence of poverty due to the systems and policy choices they have made.
This shows that addressing poverty—and preventing it in the future—is a choice, one that is essential to building a just, inclusive, and resilient future for all of us on this planet.
Poverty is not a natural condition. It is created by the systems we design. It is a direct consequence of structures that exclude, marginalize, and deny opportunities to people—particularly women, youth, rural populations, and linguistic and cultural minorities.
I have argued throughout my life that poverty is created not by poor people themselves, but by the institutions that society has built and of which we are so proud. One example is the global financial system, which excludes the bottom half of the population in any given country.
My lifelong work with microcredit has been aimed at addressing this exclusion of half the population from the banking system—especially women and youth. The call to reduce poverty lies at the core of sustainable development, as it is fundamental to achieving long-term social and economic progress.
The United Nations Sustainable Development Goal No. 1 — “No Poverty” — aims at eradicating poverty in all its forms, everywhere, by 2030. This goal is deeply interconnected with other SDGs, including quality education, good health and well-being, and decent work, highlighting the need for a holistic approach. Achieving meaningful progress in poverty reduction therefore requires coordinated action from governments, international organizations, communities, and individuals.
From this point of view, we must remember that people are inherently enterprising. With the right opportunities, anyone can contribute, innovate, and thrive. We need to redesign our systems so that inclusion, fairness, and human dignity are at their core. Only then can we end poverty once and for all.
I don’t believe this gathering today is merely another policy meeting. I believe it could be a vital step toward reimagining a poverty-free future—one of the three components of my vision of building a “world of three zeros.”
As we face mounting global crises—from pandemics and wars to job disruptions caused by technology, especially artificial intelligence—we must urgently rethink our strategies to combat poverty. Our goal should not simply be to alleviate poverty temporarily, but to build a world where poverty no longer exists.
Distinguished gathering, my journey in the fight against poverty began in post-independence Bangladesh in the 1970s. I was teaching economics, yet I realized that the theories I taught were of little use to people struggling to find food for survival.
I saw people dying of hunger, losing whatever assets they had to loan sharks, while the financial institutions that existed were not concerned with helping them. That is when I began to look at things differently—to find a way to help those who fall through the cracks of our traditional financial systems.
I started lending very small amounts—as little as one dollar—to poor people, especially women, without requiring collateral. The success of this experiment inspired me to establish Grameen Bank. It showed the world that the poor are not only creditworthy but full of potential and creativity to change their own destinies.
These women repaid their loans, built small businesses, supported their families, sent their children to school, and slowly transformed their lives. Our successful model of microfinance and social business has gained global traction because it places power directly in the hands of the poor. It does not treat them as passive recipients of charity, but as entrepreneurs capable of transforming their own futures through effort and ingenuity.
In Bangladesh, we have witnessed one of the most significant poverty-reduction stories in recent history. Over the past few decades, extreme poverty has fallen from over 40% to below 10%, and microcredit has played a crucial role in this success—reaching millions of households, particularly women in rural and hard-to-reach areas, enabling them to start businesses, earn income, and invest in their families, health, education, and well-being.
Microcredit provided the poor with access to finance—something the traditional banking system had long denied—and turned them into entrepreneurs, not job seekers. This access empowered women, fostered entrepreneurship, and promoted grassroots economic growth.
Some might argue that this model works only in developing countries and would not suit wealthier ones. But poverty exists in rich countries too. In fact, our model has proven effective in addressing poverty among poor women and low-income groups even in wealthy nations.
We introduced it in the United States with remarkable success. Grameen America, as it is known, now operates in major cities across the U.S., serving 250,000 low-income women and having disbursed 6.2 billion dollars in loans. The institution is sustainable—it covers its own costs and continues to expand. Just like in rural Bangladesh, these women start small businesses, generate income, and transform their lives. The repayment rate is almost 100%.
This proves something vital: poverty exists everywhere, but so does the human potential to overcome it. We simply need to redesign our systems to give people the tools and the space to flourish within an enabling economic framework.
Let us not forget that we live in a deeply interconnected global economy. The anti-poverty strategy of any country—or community—must take into account its partnerships with the rest of the world.
Against this backdrop, I would like to present five specific proposals as we continue our discussions on the EU anti-poverty strategy:
- Doing business needs a makeover. We should promote and scale up social businesses as vital drivers of poverty reduction, empowering communities through sustainable and locally led economic solutions.
- We need new ways to invest in innovation. The EU could establish a Global South Innovation Fund to support community-driven, digital, and climate-resilient solutions for poverty reduction, while also increasing concessional climate financing for vulnerable countries. Minimizing the vulnerabilities of climate-impacted populations will help curb irregular migration and address a root cause of poverty.
- Reducing poverty elsewhere will strengthen the EU’s own anti-poverty drive. We can enhance fair-trade access and simplify GSP+ schemes for least-developed and transitioning economies to create sustainable livelihoods. This can help stem the flow of economic migrants toward the EU and free resources for more productive uses.
- Tapping into the global talent pool is key to economic prosperity. We can develop more legal migration pathways and promote labour-mobility partnerships to ensure safe migration, skills transfer, and inclusive economic opportunities.
- We must strengthen support for inclusive local governance and civil-society engagement to enhance transparency, accountability, and the effectiveness of anti-poverty strategies.
Distinguished guests, ladies and gentlemen, we must face a simple truth: poverty is not created by the poor—it is created by the system we have built. It is our collective responsibility to rebuild that system, placing people and the planet first.
In this spirit, let us strive for a world of three zeros:
- Zero poverty, through zero wealth concentration.
- Zero unemployment, by unleashing entrepreneurship and creativity in everyone.
- Zero net carbon emissions.
This is not a utopian dream; it is a pragmatic and achievable vision that requires only collective will and urgent action—beginning with each one of us.
Let us unite in purpose, embrace bold action, and act now. Once again, I commend the European Union for its timely and important effort to develop a comprehensive anti-poverty strategy, and I wish it every success.
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
