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Tuesday, March 15, 2011

Is This the End for Muhammad Yunus?

Photo: MUNIR UZ ZAMAN/AFP/Getty Images

In today's Bangladesh, even a Nobel Prize can't protect you from persecution


THE LAST hope for Muhammad Yunus, Bangladesh's Nobel Peace Prize winner and founder of the path breaking microcredit institution Grameen Bank, rests with a hearing in the appellate division of the Supreme Court of Bangladesh starting on Tuesday.

Last week, after three days of argument, a lower court, the High Court upheld the legality of an order given the previous week by the country's central bank that required him to leave his post of managing director because he was over 60 years of age. Yunus is now 70, and the High Court held that Grameen Bank's own staff regulations required employees to retire at 60, including him.

Yunus's own lawyers reject that interpretation of the law and hope now to persuade the appellate division that the High Court decision was "entirely perverse," "a total departure from all ordinary norms of practice," and "a total denial of justice," as they write in their appeal filing.

If the High Court decision stands, not only will Yunus be out of a job, it will also mean that at the time he received his Nobel prize in October 2006, he was illegally holding the position of managing director at the bank. Who knows what would be the legal status of decisions and agreements that Yunus made since 1990?
The charge that Yunus unlawfully stayed in his post is just one of the government's many allegations.

Last week, Sajeeb Wazed, the prime minister's son, who has also been appointed as her advisor, sent out an email setting out a series of allegations against the bank including ”fraud," "theft," "tax evasion," "draconian" methods of loan recovery and "embezzlement." He admitted that the source of these allegations -- which are forcefully denied by Grameen Bank -- are government legal papers.

The government and its supporters portray the government's action against Yunus as simply part of its commitment to "rule of law."

The law is clear, they say: Yunus simply should not have been managing director of the bank since he turned 60. The government's current action is only directed at correcting that illegality, they claim. If he committed crimes he should be brought to account.

There is certainly some support for this position. As one High Court reporter told me, "Our sentiment is that Yunus's Nobel prize has nothing to do with his professional conduct and this prize does not give him any immunity from the music of law."

Nayeemul Islam Khan, the editor of the influential Bengali language newspaper Amader Shomoy argues that the government's action not only reflects a principled decision on the part of the government but should be applauded by the international community.

"By taking actions against the illegal activities/irregularities/unauthorized actions by Dr. Yunus and the Grameen Bank board, the government in fact is enhancing the image of the country by giving out the strong message that there is zero tolerance from [the] present government on corruption and irregularities," he wrote recently.

Others say the attack on Yunus is politically motivated.

There are few people more critical of microfinance's contribution towards alleviating poverty than Nurul Kabir, the editor of the English language newspaper New Age, and one might well have expected him to support the government in its attack on Grameen.

However in his view, the government's action against Yunus has nothing to do with principle or the rule of law -- it's a vendetta.

"Hundreds of Awami League party men are committing innumerable illegal actions across the country with absolute impunity from the government," he says, referring to the ruling party of Prime Minister Sheikh Hasina. "The first thing that the government did after coming into government was to withdraw corruption charges against the ruling party leaders. So, we have no reason to believe that the government is serious about fighting allegations of corruption."

Those who share Kabir's view point to two key events to explain the government's
 move against Yunus.

Since 1997, when, during her first term, Hasina signed the Chittagong Hill Tracts peace treaty bringing an end to a decade-long internal military conflict, the prime minister thought that she should get the prize. She even sent senior foreign office officials around the world in search of nominations. Hasina is therefore said to have been none too pleased that Yunus received all the international acclaim.

This may not have mattered much, were it not that six months after wining the award, in March 2007, Yunus announced that that he would set up a new political party, called Nagorik Shakti (Citizens Power). He wanted, he said at the time, a "complete emasculation of the established political parties" in order to "cleanse the polity of massive corruption."

It happened during a controversial two-year period when the country was in a state of emergency, with the interim government, supported by the army, advocating a new kind of politics without the leaders of the two main political parties.

Though it was a short-lived effort on Yunus's part, some claim that Hasina saw his intervention as a direct personal attack on her and the Awami League. "She thought that he was involved with the army in trying to remove her and [opposition party leader] Khaleda Zia from politics. That the army's plan to remove her was also his plan," a former bureaucrat said.

Now, however, all eyes will be on Yunus's appeal -- which looks to many like a foregone conclusion. In the two years that the current Awami League government has been in power, the government has yet to lose an important political case in the courts.

Though the independence of the judiciary is enshrined in Bangladesh's constitution, governments of all types may have significant leverage over judges -- particularly if they require confirmation of their permanent judicial status, want promotion to the appellate division, or are seeking appointment as chief justice. Lawyers here commonly talk about this leverage being used on occasion -- though there is no direct evidence.

So unless the appellate division looks kindly on Yunus's legal arguments, and more significantly feels able to take a position that will set them in opposition to the government, Grameen Bank will be looking for a new managing director this week. #

First published in Foreign Policy magazine, March 15, 2011

David Bergman is special reports editor of the Bangladesh daily newspaper New Age. He also happens to be married to one of the members of Muhammad Yunus’s legal team

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