Friday, March 04, 2011

You're fired. No, I'm not

MUHAMMAD YUNUS, who won the Nobel peace prize in 2007 for founding Grameen Bank, insists that he is still its managing director. The public image of Grameen, a pioneering microcredit agency with 8m borrowers, is practically inseparable from Mr Yunus, the man. But on March 2nd Bangladesh’s central bank announced that it had sacked him.

On March 3rd he was back in court, fighting to have himself reinstated. The most recent attempt to force Mr Yunus from the bank he founded more than 30 years ago is the culmination of three-month campaign of sustained media and legal harassment by the Awami League (AL) government. The siege began soon after a documentary was broadcast on Norwegian television broadcast last November. (Norwegians, naturally, take a special interest in the peace prizes’s honorees.) The programme claimed that 15 years ago millions of dollars had “disappeared” from Grameen Bank.

Never mind that the Norwegian government’s official inquiry found the documentary’s allegations to be baseless. This provided Sheikh Hasina, Bangladesh’s prime minister, with the perfect pretext for making good on a carefully nurtured vendetta.

Fourteen years ago, in Sheikh Hasina’s first term of office the situation could not though have been more different. In February 1997, as co-chair of the Microcredit Summit Council of Heads of State and Government, she declared that “We in Bangladesh are proud of the outstanding work done by Professor Muhammad Yunus and the Grameen Bank he founded.”

He has demonstrated to the world that the poor have the capacity to productively use even a small credit and change their fate [sic]. The success of the Grameen Bank has created optimism about the viability of banks engaged in extending microcredit to the poor.
So one might have expected her to be pleased when, nine years later, Muhammed Yunus won the Nobel peace prize for those very achievements. But as it happens Sheikh Hasina had long before come to think that she herself was due the prize: not for microcredit-anything but for signing the Chittagong Hill Tracts treaty, also in 1997, which brought an end to almost two decades of fighting. Egged on by sycophants, she sent senior civil servants around the world to lobby for her nomination, unsuccessfully.

Instead, suddenly, Mr Yunus had become by far the most famous Bangladeshi in the world, usurping even the prime minister’s late father, Sheikh Mujibur Rahman, who led the country to Independence in 1971. According to those who know her personally, this was a bitter pill for Sheikh Hasina to swallow.

Her resentment turned into open hostility when Mr Yunus announced, five months after he received his Nobel, that he was going to set up a political party. This came at the beginning of a two-year period of rule by a caretaker government installed by the army. The generals’ hope had been to free the country’s politics from the axis of sparring civilian women, Sheikh Hasina and Khaleda Zia, round which it had been spinning unhappily. Mr Yunus stepped in with a call for a “complete emasculation of the established political parties” in order “to cleanse the polity of massive corruption”.
Whatever Mr Yunus’s actual intentions, Sheikh Hasina saw his intervention as personal affront against her and the AL. “She thought that he was involved with the army in trying to remove her from politics. That the army’s plan to remove her was also his plan,” said a former senior bureaucrat who knows the prime minister well.

The central bank, called the Bangladesh Bank, now claims that Mr Yunus has been holding the post of managing director illegally since 1999, when Grameen Bank’s board last renewed his contract. The argument is that it never gave its “approval” to his reappointment.

This sounds like clutching at straws. Mohammad Zahir, a senior supreme court lawyer in Bangladesh, independent of both banks says that the central bank had understood perfectly well that Mr Yunus was Grameen’s managing director. “If the Bangladesh Bank allowed Yunus to continue as managing director all these years, why should he not have assumed that it approved of his appointment?” Mr Zahir asks. But Bangladesh’s courts have become increasingly supine when it comes to the government. It would be a brave judge, willing to forfeit promotion, say, who would dare give an order in support of Mr Yunus’s position.

Perhaps, the most surprising thing in this whole saga is how much of its international reputation the government is willing to risk in order to remove Muhammad Yunus from Grameen Bank. It is difficult to see what there is to gain from Mr Yunus’s removal, apart from the satisfaction in satisfying a grudge—unless, is it possible?—the government intends to take control of the bank, and use it for its political purposes.

Whatever the motive, Sheikh Hasina’s government has chosen to join the ignominious little club of governments who turn against their own Nobel peace-prize-winning citizens. #

First published The Economist, United Kingdom, March 3, 2011