Monday, 7 March 2011
Commentary : Dr Muhammad Yunus – Washington's blue-eyed Boy
by KBM Mahmoud
AN extraordinary situation has developed over the government decision to remove Muhammad Yunus from the position of chief executive officer and managing director of Grameen Bank which the western nations, notably the United States, have endorsed as a 'model' for microcredit lending and alleviation of poverty in the developing world, an assessment disputed by many other socioeconomic theoreticians.
It started with a national English-language daily carrying a front-page story on February 28 headlined 'US asks the government not to harass Yunus'. The story quoting 'a senior western diplomat with direct knowledge of these (US-led) conversations' started with an intro which read as follows: 'US officials have told Sheikh Hasina that there would be no further high level diplomatic interaction between the United States and Bangladesh until the harassment of Muhammad Yunus, founder of the Grameen Bank, ends.'
The Bangladesh Bank, which is the regulatory authority for all banking institutions, including Grameen Bank, has since made a formal announcement of relinquishment of Muhammad Yunus from his position in Grameen Bank as the CEO based on the applicable rule of retirement for the position which, expectedly, became part of the lead news on Wednesday in the media at home and abroad. In the meantime, national news media has quoted a spokesperson in Grameen Bank that Muhammad Yunus was 'in charge' and that the government decision was to be 'reviewed' under the light of the law, clearly forewarning a legal battle on the issue ahead.
It is not the intention of this writer to venture, at this point, at determining the merit—or the lack of it—of the grounds underlying the government decision of removal of Dr Yunus from the position at point. What is astounding, in the first place, is the manner and extent of pressure purportedly being exerted by the Washington in favour of its blue-eyed boy, Dr Yunus. However, a look back at some historical facts would be relevant for a moral evaluation of Dr Yunus.
Few people are aware that Dr Muhammad Yunus, decades before he became important or well-known enough to befriend people like Bill Clinton in Washington, was the blue-eyed boy of the late president Ziaur Rahman. Ziaur Rahman viewed Yunus, then a teacher in Chittagong University, as a key player for the 'reforms' he was to attempt to take Bangladesh away from the road chosen by Sheikh Mujibur Rahman and his predecessor comrades like Tajuddin Ahmed, who dared name Bangladesh a 'people's republic' and adopt 'socialism' as one of the constitutional goals.
It is part of the socio-politico plan envisioned and launched after the removal of Sheikh Mujibur Rahman from power in Bangladesh in 1975 that the concept of Grameen Bank was evolved during the reign of Ziaur Rahman and after Grameen Bank was set up by a special ordinance in early 1980s, the 'era' of Dr Yunus began. Backed by unprecedented 'officially approved' tax exemptions by the National Board of Revenue and other administrative support, Grameen Bank (officially categorised as a non-profit institution) saw a phenomenal growth both in its operation and profits over the years. The tax-protection continued unhindered during the entire tenures of General Ershad and through the first term of Khaleda Zia. During the first tenure of Sheikh Hasina's Awami League-led government, the tax concession was extended after a momentary hindrance.
By the mid-1990s Yunus was able to catch the attention of the western world, notably the US, as a messiah who was successfully implanting the concept of 'capitalism' at the grass-root level of a nation which, only years ago (in the early 70s in the wake of the liberation war), looked like the breeding ground of a socialist movement which, to the chagrin of Henry Kissinger and company in the USA, had all the potential of engulfing the entire sub-continent, if left unchecked.
Apart from the domestic, administrative and political support, Dr Yunus's advent also received a boost from a combination of world events. The emergence of Yunus and Grameen Bank coincided with the bolstering of free market economy, boldly proclaimed as 'market capitalism' by erstwhile US Federal Reserve Bank chief Alan Greenspan, from the late 1970s and was reinforced in the following years by US president Ronald Reagan, which was to dominate the world economic order for the next two decades. Successive finance ministers and fiscal policymakers in our country have been pawns of this 'free economy' policy sired by the corporate-controlled America to this date.
At home, stories had occasionally surfaced about mismanagement in Grameen Bank, the exorbitantly high interest rate payable by borrowers, ruthless recovery methods applied by the Grameen and the consequent mass pauperisation of the microcredit loan recipients. But these received only limited or no attention in the home media on which should have rested the primary responsibly to 'tell the spook from the tree.' The fundamental reason being our media too had come of age as a client of free market economy, and was totally different in character and culture from its predecessor in the 1960s or even early 1970s (when this writer happened to be an active journalist). After all, there is nothing wrong in destitution or pauperisation if capitalist order is acceptable, which our media and the nation, by and large, seem to have taken lying down from day one after the political change in 1975.
Big guns like Bill Clinton's support notwithstanding, there still had been blogs and comments in foreign media and international watchdog forums for non-government organisations alleging lack of transparency and accountability in Grameen but little attention was paid by the home media to such allegations. Nor did our media undertake the minimum required research into the real benefits of Grameen loans or cover the social consequences of Grameen phenomenon in the correct socio-economic perspective applicable to Bangladesh situation.
The first major ripple about Grameen and Dr Yunus was caused when a Norwegian journalist released a documentary last December alleging that Yunus had quietly transferred from the Grameen Bank $48 million in Norwegian aid money to a sister company in violation of the ground rules of the Norwegian Fund. Initially, there were conflicting responses to the exposé both by the Norwegian authorities and from Dr Yunus's camp. However, the alleged discrepancy was 'validated' with cooperation from the Norwegian fund subsequently in a manner which was found not very convincing by most observers. Interestingly, the leading two newspapers in Bangladesh in English and Bangla (owned by the same group) did not even carry the news until after a rejoinder was issued by Grameen Bank to the Norwegian documentary.
Meanwhile, Dr Muhammad Yunus has grown, from the humble position of a university teacher in the 1970s, to the position of CEO or entrepreneur of some 40-plus odd corporations and enterprises under Grameen family of companies with such administrative patronage as to have majority of the entities placed under non-profit organisations for obvious tax exemptions. Curiously, his establishments have in their staff a sizeable number of former high officials of government establishments, including from the National Board of Revenue, which is the regulatory authority for tax issues in the country. Critics say many of the incumbents in the Yunus establishments were in his payroll even before their tenure with the government had ended.
Internationally, Yunus had in the course of time secured the patronage to officially set up a Grameen-type base in the US. Among other status, corporate America has found Yunus worthy of being a member of at least six high powered committees with various domestic and international agenda in which he has the privilege to rub shoulders with such celebrities as Bill Gates. Elsewhere, the West has rewarded Yunus with several profitable joint-venture projects (e.g. Grameen Telecom with a significant stake in the largest mobile phone operator Grameen Phone) and similar patronage from other western corporations for promoting the socio-politico-economic philosophy of the G-20 continues. Incidentally, about the time the Yunus lobby from Washington to Norway succeeded crowning him with the Nobel Peace Prize, Time Magazine preferred to downgrade him to one among ten most successful businessmen by global standards instead.
No wonder Dr Yunus, who is an economist by basic discipline, has not ever had a word of criticism for the global exploitation of the multinational corporations or destructive policies of globalisation which have aroused stormy protests from the developing world, including the self-immolation of a Korean farmer before a G-20 Meet a few years ago.
Bangladesh has its own sovereign right to evaluate and decide the status and fate of its own subjects under the laws of the land. No foreign government, be it Washington or the European Union, has the right of intrusion to such process. True, the garment manufacturers in Bangladesh need a market for their product in the US. So do China or India or, for that matter, other countries who have bilateral relations with the USA, and have interdependence on the economic and, perhaps, on the political front. But every nation has to define the frontiers of its own self-interest that cannot be compromised. Look at China for the best example. Washington must remember that Bangladesh did not liberate itself in 1971 with the permission of US president Nixon or Henry Kissinger, rather the opposite was the case. If only for this big reason, it would be wrong for Washington to expect Sheikh Hasina, or whoever takes her place, to act as Hamid Karzai of Afghanistan.
Turning to the case of Dr Yunus, the administration has the duty to perform much more than the eyes meet so far in terms of investigations said to be in progress. A scrutiny of year-to-year official wealth statement of Dr Yunus from the days he was a teacher in Chittagong University should be the starting point for finding out the secrets of his success as 'one of top ten successful businessmen' by global standards, as Time Magazine called him. Did he secure the permissions from the central bank, mandatory under the law for all Bangladeshis investing abroad? What is his declared net worth, including in foreign investments? Does it cover the assets and investments reported in the media, promoted or owned by Yunus? These are only partial listings of the terms of reference for any investigation relevant for the case at point; experts on the subject should be able to add more.
KBM Mahmoud is a former journalist.
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