Need dedicated ministry for informal sector: Yunus

It is time for the informal sector to have a dedicated ministry in the government. This will help the poor and nurture entrepreneurship in the rural economy, Nobel laureate Muhammad Yunus said.

Addressing a webinar, ‘No Going Back - Forging a new future after Covid-19’ organised by the FICCI Ladies Organisation (FLO), on Monday, the Grameen Bank founder said although more than 50 per cent of labour force in countries such as India and Bangladesh are from the informal sector, there are no dedicated laws, agencies, policies or ministries to protect them like those who are employed in the formal sector.

Highlighting the plight of millions of migrant labourers in India who had to walk thousands of miles to go back to their hometowns, Yunus asked, “What a shame that they have to do that and how desperate one must be to do something like that? ”

Noting that coronavirus has only exposed the weakness in the society, he said, “They (poor and migrant workers) are in the city, they work here and we know all along but it was never as visible as coronavirus made it because it has flushed them out of the city and put them on the highway and then everybody saw that.”

Lambasting the whole economic system, the icon of micro-lending model said it is shameful if one cannot build a system where an individual does not have to leave his friends, family and the whole community and move thousands of miles away in search of opportunities.

“The very formulation of the economy is wrong. By giving a blanket term for the poor as an ‘informal sector’, the government has created a kind of negative impression that this sector is not contributing to the economy and a feeling that it is reducing the capacity of the economy,” Yunus said.

Suggesting that a new definition or label to the informal sector will bring tremendous changes, the Nobel laureate said he would like it to be called a ‘micro entrepreneurial sector’.

“I would like to see this as an entire entrepreneurial pyramid, with all the billionaires on top followed by those middle level entrepreneurs and at the base level the micro entrepreneurs, who are the biggest part of the society,” he added.

Expressing concerns over the tremendous preparation across the world to go back to the pre-Covid world, Yunus said, “The world we are coming from is not a very happy one but a terrible world, not just on one but by many accounts.”

Noting that the pandemic has given a ‘respite’, he said, “We could not have stopped the train (economic machine) but corona gave us a wonderful time to stop the train and think and go in a different direction.”

Other threats

Terming global warming, wealth concentration and artificial intelligence (AI) as some of the major threats in the pre-Covid world, he said one should not prepare themselves to go back to the same world.

On the possibility of creating a social business model, the economist said that all human beings have two aspects in them - selfish and selfless, but economics has developed only the selfish part of human being and encouraged only maximisation of business profit thereby ignoring all other business aspects.