Bangladesh Needs Strong Unions, Not Outside Pressure

FAZLE HASAN ABED

BANGLADESH, my country, is again in tears. Last week in Savar, a suburb of Dhaka, the capital, a poorly constructed building that housed garment factories and other businesses collapsed. More than 300 have been confirmed dead, and the final death toll could well exceed 700.

Bangladesh is no stranger to disasters, both natural and man-made. Still, this is one of the saddest chapters since we won our independence in 1971, precisely because the tragedy could easily have been prevented. Structural weaknesses had been found but not fixed. The victims were among the most vulnerable in our society — hardworking people making an honest, but meager, living. Many died manufacturing clothing for Western brands.

I appreciate the unease a Westerner might feel knowing that the clothes on his or her back were stitched together by people working long hours in dangerous conditions. It is natural that people in richer countries are now asking how they can put pressure on Bangladesh and its manufacturers to improve the country’s dismal safety record.

But ceasing the purchase of Bangladeshi-manufactured goods, as some have suggested, would not be the compassionate course of action. Economic opportunities from the garment industry have played an important role in making social change possible in my country, with about three million women now working in the garment sector. I have dedicated my life to alleviating entrenched poverty, and I know that boycotting brands that do business in Bangladesh might only further impoverish those who most need to put food on their tables, since the foreign brands would simply take their manufacturing contracts to other countries.

The rise of manufacturing here has had good effects. In the past, for example, a poor family’s vision for a newborn daughter’s future was often to marry her off as young as possible, since the dowry paid to a husband’s family grows as a daughter gets older. Even after the dowry was outlawed in 1980, the practice continued. A girl would often be married off as young as 13, and would never leave her village, never know a brighter future for herself or her children.

Partly because many women and their daughters now take garment industry jobs — even in factories where workers’ rights are virtually nonexistent — families living in poverty have changed their vision of the future. More have acquired long-term goals, like educating their sons and daughters, saving and taking microloans to start new businesses, and building and maintaining more sanitary living spaces.

Many outsiders think only of calamity when they hear the word Bangladesh — of factory fires, cyclones, floods and poverty. But the true Bangladesh is also the birthplace of microfinance and home to a robust civil society. It has seen rapid gains in living standards: maternal mortality is one-quarter of what it was in 1990; early childhood mortality is one-fifth of what it was in 1980, and we have eliminated the gender gap in primary and secondary school enrollment.

These remarkable gains will mean little if we allow tragedies like the one at Savar to continue. The law must work for everyone, rich and poor, landless laborer and factory owner alike. We must not allow those who benefit from the exploitation of the vulnerable to continue to treat life so cheaply.

What, then, is the solution? The changes must come first from Bangladesh itself. My country will require new political will to hold accountable those who willingly put human lives at such grave risk. It will also require the support of factory owners; civil society organizations, including my own; and the private sector, including Western buyers.

The solutions start with the workers themselves; they must be allowed by their employers to unionize, so they can engage in collective bargaining and hold their employers responsible for basic standards of pay and safety. Their organized power is the only thing that can stand up to the otherwise unaccountable nexus of business owners and politicians, who are often one and the same.

Western buyers, instead of squeezing factory owners on price, should finance better safety standards. The point needs to be made in the marketplace overseas that safety improvements are not so expensive that they can be used as an excuse for raising prices to the consumer. And consumers who are shocked by the working conditions need to realize that a playing field where the price tag is the only standard for a purchase is not a level one when workers’ lives are at stake.

At the same time, the owners themselves cannot be let off the hook, for there is no excuse for criminal negligence. But they cannot be trusted to voluntarily do all that they might. In a country with 100,000 factories in and near the capital, and three million workers in its garment industry, an inspection force numbering 18 people only invites unconscionable lapses on the part of unscrupulous employers. The inspection force must be increased drastically, and it must vigorously enforce safety standards.

The government, finally, must stop neglecting worker safety issues, even as it steps up enforcement. But that will be extremely difficult to accomplish as long as there is an unholy web of employers and politicians colluding to avoid responsibility for criminal negligence; that, in the end, is what trapped thousands of workers in the flimsy factory building that collapsed on them in Savar. Those workers cannot be forgotten until these issues are resolved.

“Made in Bangladesh” should be a mark of pride, not shame. Bangladeshi civil society stands ready to work with the authorities to make this so. In the 1970s, during the early years of my country’s nationhood, Bangladesh was suffused with the energy of the struggle for independence, a yearning for freedom from exploitation. From this energy came microfinance, community health work, and other social innovations that, combined with new economic opportunities in export industries like textiles, have transformed the lives of tens of millions of poor people, particularly women.

Today I grieve with my fellow countrymen, but I also raise my voice to say that this must not continue. As we mourn our losses, let us rekindle that spirit of liberation.

Article first appeared in the New York Times, United States, April 29, 2013

Fazle Hasan Abed, winner of prestigious international awards is the founder and chairman of the antipoverty organization BRAC, formerly the Bangladesh Rural Advancement Committee.

Muhammad Yunus and Bangladesh government battle over Grameen Bank

The 8.3 million women who form the bulk of the Nobel-winning microfinance bank's shareholders could be the losers

SYED ZAIN AL-MAHMOOD in Dhaka

WHEN TASLIMA Begum, a housewife turned entrepreneur from the north of Bangladesh, accepted the Nobel peace prize in Oslo in December 2006, it was a proud moment for Bangladeshi women. The Nobel citation said the prize was awarded to Muhammad Yunus and Grameen Bank "for their efforts to create economic and social development from below".

Begum, who had used her first 1,500 taka (£12) microloan to buy a goat in 1992 and went on to become an elected director of Grameen's board, said: "My parents gave me birth, but Grameen Bank gave me a life."

Six years on from Oslo, the 8.3 million women who make up the bulk of the microfinance bank's shareholders are facing an unexpected challenge. The bank that received the Nobel prize for its work in fostering socio-economic development from below is fighting to stave off moves from its own government to enforce decisions from above.

In August, the government of Bangladesh amended the 29-year-old law governing Grameen Bank, giving more power to the government-appointed chairman to choose the bank's chief executive. The government, a minority shareholder, also constituted a commission of inquiry, the Grameen Bank Commission, which is expected to recommend further changes to the governance structure of the microlender.

Critics say the move amounts to a government takeover of the institution.

Yunus said there had been no failure in the running of Grameen to warrant an investigation, and he questioned the need for a commission of inquiry.

"People are copying Grameen's management system in other countries," he said. "This is unique not only in Bangladesh but in the [rest of the] developing world. Our staff members transport millions of taka in the villages without armored cars or armed guards. Nobody steals our money. Surely we're doing something right with our management model."

This is the latest in a long-running tug of war between Yunus and the government, which removed Yunus as the head of Grameen last year, saying he had passed retirement age.

Mirza Azizul Islam, a prominent economist and former economic adviser to the government, said the trend was towards diluting the role of the board of directors and concentrating power in the hands of government appointees.

"With these unnecessary changes, the government is tinkering with a system that has allowed Grameen to prosper while many state-run banks are embroiled in scandals," said Islam. "If the basic structure of Grameen is changed, the worry is that the poor women who are the rightful owners of the bank will be disenfranchised."

Grameen is governed by a 12-member board, nine members of which are elected from among the borrowers while the other three, including the chairman, are nominated by the government. The government owns 3% of the bank based on equity, while the rest of the shares are held by the bank's members, mostly women.

"Grameen Bank was formed as an institution owned by its borrower members, who are poor women," said Yunus. "Through its unique decision-making process, Grameen Bank has given millions of women the means to emerge from the shadows in a male-dominated society and to make something of themselves."

Tahsina Khatun, an elected director of Grameen, says the bank's independence is non-negotiable. "Grameen is our bank," she said. "We bought shares bit by bit with our savings. Now the government has started saying this is a government bank. How can we accept that?"

Khatun said Grameen, which gives small loans without collateral, runs on a system based on trust. "If the trust is ruined, the bank will certainly be affected."

At the heart of the dispute are conflicting interpretations of the bank's ordinance. A government review committee concluded last year that since Grameen was created under a special law, it was a statutory public authority – in other words, a government bank.

Yunus contends that Grameen is an independent specialised bank which, according to its founding charter, is run by its board of directors, not by the government. Grameen's employees do not take their salaries from the government budget, which means they are not public servants.

The Awami League-led government's antipathy towards Yunus has been made clear by a series of public comments made by government ministers. The prime minister, Sheikh Hasina, has criticised microfinance institutions for "sucking blood from the poor".

Last week, finance minister Abul Maal Abdul Muhith caused consternation when he quoted another Nobel laureate, the Indian economist Amartya Sen, as saying Yunus was responsible for tarnishing Bangladesh's image abroad. Muhith backtracked after Sen swiftly denied the comments.

Mozammel Haque, chairman of Grameen, denied the government was taking over the bank. "The government will not take over the bank," he claimed. "The bank's operations have been running smoothly according to the law." Haque said the change in the ordinance was necessary to resolve a stalemate over the appointment of a new managing director.

The government has reacted to the stiff opposition put up by Grameen's directors by asking a commission to look into the women's "qualifications" to serve as directors. Critics have accused the government of harassment. Yunus said: "I find it outrageous that people are calling into question the qualifications of these women who have become owners of the bank with their own money and through their hard work."

First published in the Guardian, London, Britain, 21 November 2012

Syed Zain Al-Mahmood is an investigative reporter and editor based in Dhaka, Bangladesh

The poor aren’t poor by choice

BISMAH KASURI

THIS IS the belief held by many in our society today about the poor. But what possible reason would allude to the fact that 70 million Pakistanis actually want to live in such destitute conditions? Those who believe that the state of poverty is an inescapable trap, tirelessly attempt to help others break free from this vicious cycle. These people run NGOs, fundraise, and engage in various philanthropic activities to alleviate poverty in any capacity that they are able to. But why do they simply donate money to the poor instead of diverting those funds towards the setup of a self-sustaining project that facilitates greater income-earning abilities in the long-run? The poor do not want to be poor. But until recently, they had no choice but to be poor.

Thanks to Nobel Laureate, Muhammad Yunus of Bangladesh, millions of poor people all over the world are now financially stable, and are rising over and above the poverty line every day. Dr Yunus founded the Grameen Bank on the basis that it would only grant loans to the poor, who, to this day, remain unrepresented in most large private financial institutions. The founder of microfinance has been able to change the face of Bangladesh by giving loans of small amounts to the poor. With the help of structured weekly meetings in over 400 Bangladeshi villages to collect loan repayment instalments, the Grameen Bank has an astounding loan repayment rate of 98 percent. One would think of comparing this figure to the big banks on Wall Street that came crashing down during the economic meltdown but there really is no comparison.

According to a recent opinion piece by Jamil Nasir in The News, poverty alleviation policies need to be formed based on careful research and analysis of the living conditions of the poor (August 11, 2012). He draws extensively from the seminal research undertaken by professors Abhijit Banerjee and Esther Duflo of MIT. They assert that the analysis of expenditure patterns, basic necessities, and economic environment of the poor, are necessary for effective policy-making. If there is one thing I have learned during my time at the Grameen Bank, it is that they know their clients. They know the lives of the people whom they serve, and they understand the limitations of the social structure in which they operate. This is why the Grameen model of microcredit is not only based on the provision of finances, but also on the more human concepts of trust, motivation, and community. These emotional sentiments stir from “The Sixteen Decisions” of Grameen, a concept that encourages and facilitates an overall higher standard of living to all of its borrowers.

When a woman is granted a Grameen Bank loan, she must promise to abide by the Sixteen Decisions to the best of her ability. These are a set of agreements laid out by Dr Yunus to help improve the overall standard of living, which include promises to use sanitary toilets, drinking clean water, and fully educating their children. The Sixteen Decisions serve as a motivating tool for Grameen borrowers all over Bangladesh, not only to better their financial conditions, but to improve all aspects of their living standards. As I witnessed in the villages of Bangladesh firsthand, the implementation of the Sixteen Decisions has had an astounding impact on the entire country. Not a single woman that I met in the village of Sherpur had more than four children, and 97 percent of the women were educating all of their children, including daughters. Each one of them owned homes made of solid tin-shed, equipped with fully-functioning latrines. Most importantly, these women owned clothing and press factories in which they had employed their own husbands.

Take a moment to note the vital difference in the social structures between Pakistan and Bangladesh, a country 24 years newer than our own. Dr Yunus has not only facilitated banking to the poor, but has also changed the way they live on a daily basis. His carefully crafted model of microcredit truly has transformed the lives of the poor, not only in Bangladesh, but all over the world. The “poor” Bangladeshi women, whom I have lived with over the last few months, are living proof that anything is possible with just a little bit of trust, organization, and guidance along the way. Amazing what empowering women can do for a country.

In order to reduce poverty, a much better understanding of the Grameen model is required. We should understand the lives of the 70 million Pakistanis currently living below the poverty line, and need to truly ascertain the basic human needs they are deprived of. We should understand their spending patterns, their job structures, and the culture of the communities in which they live. Simply distributing microloans every month will not bring anyone out of poverty, because poverty is not only determined by monetary wealth but also by a combination of sanitary living conditions, access to education and healthcare, and adequate nutrition.

A concept similar to the Sixteen Decisions is necessary to bring about any overall change, as it accounts for all of these facets of living. Perhaps, we as Pakistanis should spend more time delving into, and truly understanding, the needs of our people. Once we are able to tailor a poverty alleviation policy directly to their needs, the results will be nothing short of incredible.

First published in the Pakistan Today, September 2, 2012

Bismah Kasuri is a graduate in anthropology and economics from the University of Virginia, USA, she is also Social Business Intern at Yunus Centre

Banker Yunus banking on emotion defying law‏

SHAMIM CHOWDHURY

WE MUST give credit to Dr. Muhammad Yunus for taking micro financing to world stage and branding Bangladesh as the brand owner and finally wining a Nobel Prize. He may have not invented the idea but certainly he was able to give it a height which no one was able to do before. Because of his personal connection with Hillary Clinton the then first lady current Secretary of State of the most powerful country of the world Dr. Yunus was able to get the world attention.

Dr. Yunus got his first world wide media attention during the first micro summit which took place in Washington where our present PM Sheik Hasina co-chaired the summit along with Queen Sofia of Spain. In the home turf Dr. Yunus got support of the then Prime Minister Sheikh Hasina who went all the way to Washington to unveil Bangladesh brand financial system in first ever world summit on microfinance.

In the early days of microfinance, Dr. Yunus has a success story to tell but not much audience other then few media outlet. The country was going through high trouble. It was couple years after the death of Gen. Zia when Gen Ershad claimed the power overthrowing corrupt BNP government of Justice Sattar. In a state wide televised speech, Justice Sattar claims wide spread corruption in his government and asked military to take over, so did Gen Ershad. Suddenly Dr. Yunus saw some light at the end of the tunnel, military marshal law governments civil Finance Minister Abul Mal Muhit, yes readers, ironically it’s the same person who is our current Finance Minister.

Finance Minister Muhit gave an audience to Dr. Yunus and Dr. Yunus was the speaker, as good orator he was and is Yunus was able to make Muhit understand the value of starting a new bank solely for the poor. Muhit as the Finance Minister was able to get permission of Gen. Ershad to form the Bank name Grameen Bank, a bank for the poor. Ershad’s military regime issued a proclamation establishing the bank and appointed Dr. Mohammad Yunus as its Managing Director, it was 1983 and since then he is the head of this government institution.

It need to be clear that Grameen Bank unlike many other privately owned NGO is not a private entity at all but a government entity with autonomy and Dr. Yunus is nothing but government approved Managing Director of the Bank. Success of Grameen Bank is not just the success of its Managing Director Dr. Yunus’s but the government of Bangladesh and its shareholders as well.

Mohammad Yunus played a wonderful role of mentoring the organization setting its goal. The negative story picks up there where Grameen Bank a bank for the poor changed its role of providing free of collateral cheap loan to the poor especially women to high interest loan sharking business.

A noble cause and idea which started its journey from village Jobra under the stewardship of a young professor Dr. Yunus caught into so-called social business gimmick. Loan to the poor started with no interest climbed to as high as THIRTY percent though in Grameen transaction shows it as twenty percent not showing the actual cost that the borrowers has to bear.

Day by day Grameen involved it self into all sorts of profit making business, telecommunication to making so called energy curd and what not. A brand name Grameen paid a hefty price for that as well not just financially but receiving endless criticism. While the poor people caught into microfinance debt Grameen caught into illegal VOIP business and slapped with hefty punitive fines of hundreds of millions of BDT during last caretaker government and loosing its clean image.

Some people may say Dr. Yunus has no relation to those illegal wrongdoings of Grameen Telecommunication. How ever that notion will not be justified and he had to bear the responsibility. Grameen mobile is a part of Grameen family and Grameen receives a huge stash of profit out of it. So if you accept the profit you have to bear the responsibility as well.

A Nobel laureate like Dr. Yunus never came up with one word to condemn his organizations wrongdoing but keep tight-lipped. His muted unacknowledging attitude of this grave matter did hurt lot of his supporters as well as rest of the nation. Though this is nothing new from him, he kept mum or talked in favor of military and undemocratic rulers as near as past Gen. Moeenuddin-Fakhruddin or Iajuddin government.

Dr. Yunus who started (not really) claiming as the originator/author/owner of this microfinance idea thought about Grameen Bank with same obsession. Like many others who rose to power and fame Dr. Yunus started thinking about him as indispensable and his role as Managing Director as prerequisite for banks survival.

Probably Dr. Yunus himself and many others thought him and Grameen Bank as one and one entity, that thinking process was based on a complete flawed understanding. It is very unfortunate Dr. Yunus did not play an affirmative role on bringing that wrong notion down rather fueled the idea.

A noble idea strangulates to death slowly but surely. A bank that was created to ensure loan to the poor ravenous people of Bangladesh is now hungry it self for fame and ready to play any game. Getting the Nobel Prize whisked away Dr. Yunus into a fairy land of foolishly considering him as indispensable and a savior of the world poor. High ambition and hunger for fame and name ruined his stature and brought him down to earth facing criticism home and abroad.

Grameen Bank was and is an autonomous government entity though it is not just like much other autonomous body but a special one. If the banking law of the country as well as Grameen Bank’s own employee service manual clearly states that all Grameen employees will retire at age 60 then how in the world it is OK for Managing Director Dr. Yunus to violate that law and say I am indispensible therefore I must stay for life and defy any law.

Some Yunus supporter might say there are others too who has crossed that age such as PM her self or others in the cabinet. Yes that is true but that is a whole new subject/concept to deal with. Present law of the land dose allow those position holder to continue their official duty at or above sixty, if you do not like it then go ahead and make effort to change it. But as long the law allows or disallows, you just have to abide by the rule, period.

Dr. Yunus in many of his speech talked about lawlessness in our society and politics but when the time came for him to set the standard he downplayed the law and played his sentiment card and vowed to stay in power as long someone is not able to pull him down.

During caretaker military rule, Dr. Yunus talked harshly about politicians and labeled them as corrupt and promoter of family dynasty. He did talk about fresh leadership to make the difference and now when the question comes about new leadership of Grameen, Dr. Yunus back out and his laughable reply that Grameen will not be able survive without him or there is no one who can assume that responsibility. If so, then it is shame for him that he stayed in that position for couple of decade but miserably or the more correct choice of word would be mystically failed to create a chain of leadership who can and will take new challenges.

Critics say, to keep his tight grip on all matter Dr. Yunus never allowed any new leadership capable of running the organization independently around for too long. Any one who happened to be capable will be removed and a person will be replacing the position with his approval only.

The nine members of the board out of twelve are selected by Dr. Yunus himself and rest three appointed by the government of Bangladesh. Nine members of the board who has been handpicked by Dr. Yunus have absolutely no idea whets so ever of how a billion dollar bank like Grameen runs. They are there no more then to act as rubber stamp to go along with Dr. Yunus whim.

Dr. Yunus has taken full advantage of the disadvantage of his executive board members neophyte of the banking business and ruled the business as he wishes rather then following the business rule prescribed in Grameen’s business policy.

The bank which strictly supposes to land only to the poor’s started funding family owned business defying all rules. Grameen is tax exempted business institution. They do not pay to the government in return they do public service, is this what public service, service to the poor means to Dr. Yunus.

When Grameen Bank’s poor member has to return every singe penny they borrow whether loose or gain otherwise face penalty, intimidation and legal or social boycotts by the group but strangely his family gets a very sweet deal of sharing profit and loss which even commercial banks do not offer other then some Islamic banks. Is this kind justice and honesty Dr. Yunus is talking about while in the international stage.

It is unfortunate that a man of his stature will set such a bad precedence and take ill advantage of his position and international connection to pressure law of the land takes a different course to keep him in his position. It is more unfortunate that now he wants keeps the nations image hostage and play his emotions card once again to keep his position.

It is so childish for him and his lawyer Dr. Kamal Hossain to say that if he was allowed to violate the bank law for ten years then he should not be blamed about it at any letter stage? Does Dr. Yunus mean violation get justified if it was not challenged or corrected in time?

Are we going to say that recent epoch making judgment of high court on nullifying all military rule of seventies and eighties in Bangladesh and declaring it as illegal occupation of power was wrong judgment as it happened thirty years ago and no one challenged it earlier therefore illegal unconstitutional occupation of power by military rulers was justified!

High interest Grameen’s micro credit is nothing but unambiguous rape of frail but lucrative financial body of poor of the poorest especially women. Most vulnerable segment of the society is trapped into Grameen’s loan shark landing microfinance policy, calamitous attempt of the poor to escape from local loan shark known as Mahajan to get caught by institutionalized shark loan lender named Grameen is unfortunate and unwanted.

It’s a farce that the poor of the poorest who need the most low interest finance to change their ill fate are locked into maximum high interest loan up to 30 percent from Grameen while the affluent society gets loan at very low interest some where 10 to 12 percent from commercial banks. Now Grameen might say we are giving loan to someone with no collateral therefore we have to cover our risk. No comments on that as that is a fact, however then question comes, do not call this sort of loan sharking a social enterprise call it what it is.

In U.S. to often you will get advertisement about car loan or housing loan with bad credit or no credit everyone applies everyone gets credit. Those lenders are known in the U.S. as loan sharking institution and they do not challenge it. If Dr. Yunus also agrees that Grameen does the same then their will be no question but question comes when he claims to be doing business of social just. Grameen’s over exorbitant interest rates and alleged coercive debt collection policy has no difference then shark lender of the west.

What is Loan Shark: A loan shark is a person or body that offers unsecured loans at high interest rates to individuals, often enforcing repayment by blackmail or threats of violence. Dose that sounds Dr. Yunus and Grameen Bank, Yes it dose. Wikipedia Link explains the characteristics of Loan Shark: http://en.wikipedia.org/wiki/Loan_shark

If wants know more about the result of Grameen Loan Sharking business and hide and seek game then go to this link and play the video: http://www.france24.com/en/20080404-bangladesh-burden-microcredit-caring-grameen-bank-mohammed-yunnus

Watching this video will raise very suspicious question what Grameen and Dr. Yunus wants to hide from getting out? Its no wonder anymore why Dr. Yunus wrote a personal memo to NORAD asking help to keep donors fund misappropriation secret, WHY? What he is scared off! Why Dr, Yunus appointed director Noorjahan Begum ask her security to tie the journalist who simply says that he wants to ask some question! Hope one day the poor of the poorest will know about the name of the game.

I just read his public statement (March 7th 2011) where he makes calls to the nation. That is just tricky rubbish. When a case is waiting for ruling, his public statement is a mere attempt to fuel confusion among mass people and pressure on the court to take the verdict in his favor.

He and his lawyers are making every effort to make our justice system look bad that is not right thing to do for a Nobel laureate! He himself went to the court challenging Bangladesh Bank notice of his removal now after three days of deliberation his lawyers are talking saying they might not get justice. Dr. Yunus is following a carbon copy plan of Khaleda Zia after she lost her house and court fiasco played by her lawyer.

Within months of getting the Nobel Prize he applied this same sort of public call/statement technique during last military CTG attempting to grab political power in the vacuum using help from military intelligence unit. I surely hope Dr. Yunus stop this uncalled technique and keep faith on system.

I certainly hope Nobel laureate Dr. Yunus will come into his sense and do what is good for the Bank and its poor borrowers not just looking at self interest. Reduce the interest burden from the poor and be a real benevolent banker of the poor. Above all, he will abide by the law of the land as any other ordinary citizen and not claim especial stature just because of he is a Nobel laureate. #

Shamim Chowdhury is an social activist and lives in Maryland, U.S. he could be contacted veirsmill@yahoo.com