Time for a New U.S. Policy in Bangladesh

ARAFAT KABIR

Although situated in close proximity to Afghanistan and Pakistan, Bangladesh has to this point somehow avoided becoming a major headache for Washington. Yet, given recent developments, Bangladesh could soon cause U.S. officials a migraine.

Bangladesh is currently suffering some of the worst political unrest in its history. After several months of unprecedented levels of political violence, a deeply flawed election took place on January 5, the ruling party and opposition are at loggerheads today. With no end in sight to this political crisis, street violence and other unrest is bound to continue—particularly in the wake of heavily politicized trials for war crimes committed during Bangladesh’s 1971 independence war. Washington needs to wake up before the powder keg of this country spirals out of control.

However, first it is important to understand what is at stake. Over the years, Bangladesh has transformed itself in marvelous ways, serving as an example to other developing nations. The Bangladesh Bank (equivalent to the Federal Reserve) has the second highest foreign currency deposits in South Asia after India, while the country’s garment industry has become the world’s second largest. Significantly, this multi-billion-dollar industry—housed in the third largest Muslim country in the world—is largely driven by women. In Bangladesh, many more girls are in school than boys.

Furthermore, Bangladesh demonstrates an array of human development successes, ranging from decreased mortality rates to increased average incomes and less poverty. A Bangladeshi institution, Grameen Bank, has pioneered microcredit financing. Additionally, the world’s largest non-governmental organization, BRAC, has become a globally active entity whose latest tasks include helping rebuild Afghanistan. Corruption notwithstanding, some state institutions—including the Bangladesh army—have an impressive record as well. Some may associate Bangladesh’s army with mutinies and coups, but in fact it has also been lauded for its extraordinary contribution to U.N. peacekeeping missions. In honor of the great services provided by Bangladeshi forces, the African nation of Sierra Leone has declared Bangla its second language.

Meanwhile, Dhaka shelters half-a-million registered Rohingya minorities in its territory. Similarly, ghettoes inhabited by people of Pakistani origin still dwell in the heart of Dhaka. Neither Islamabad nor Naypyidaw is willing to take back these descendants—making Bangladesh the de facto safe haven for these displaced people.

To be sure, Bangladesh is also accused of providing havens for more unsavory populations. Delhi thinks Bangladesh is a potential sanctuary for separatists fighting for the independence of the northeastern states of India. Bangladesh has also been accused of harboring militants sponsored by the Pakistani intelligence. Perhaps unsurprisingly, some in Washington are concerned that Bangladesh could fall into the hands of terrorists. This is a highly misplaced concern, however.

Bangladesh has significantly curbed religious-based terrorism in recent years. Furthermore, it has helped India by arresting some of its wanted extremists. Recently, Dhaka has signed a long-awaited extradition pact with India. India appears convinced that Dhaka will continue to clamp down on anti-India activities if Sheikh Hasina remains in power. Her administration’s demonstrated willingness to support Indian interests significantly reduces Indian security worries on its Eastern flank. This helps explain why India has supported Hasina’s recent controversial reelection.

Since human rights and promoting democracy have been cornerstones of U.S. foreign policy, it is understandable that America is unable to applaud the deeply flawed election of late that returned Hasina to power. Washington’s cautious efforts in recent weeks to help bring the government and opposition together—so that they can come to an agreement to hold a fresh election—are welcome. Nevertheless, much more needs to be done.

Belatedly, U.S. policymakers seem to have realized Bangladesh’s overall importance in a number of sectors. Although President Obama has suspended GSP (Generalized System of Preferences) benefits for Bangladeshi garment manufactures, “Made in Bangladesh” still remains a trusted brand among American retailers and consumers. American conglomerates now consider Bangladesh a lucrative destination with the rise of a strong middle-class population. What is less clear is whether Washington has recognized Bangladesh’s strategic importance. Thanks to geography, the country lies somewhat equidistant from three nuclear powers. It sits along an important channel that transports massive amount of freight every year.

Washington, which has already wisely increased its military aid to Bangladesh, would be wise to build a strategic partnership with Bangladesh in order to help protect American interests in the vast Indian ocean—a region that stretches from Eastern Africa to Southeast Asia, with Bangladesh right in the middle.

Unfortunately, none of this can happen if Bangladesh’s political deadlock continues to grind on. Ongoing political clashes can end up in lawlessness, which could enable indigenous vigilante groups to proliferate. This in turn could provide an environment ripe for foreign insurgent groups.

What this all suggests it that despite Bangladesh’s many success stories—it faces many impending dangers ahead. Therefore, it is time that Washington adopts a more robust policy on Bangladesh. A prime focus of a revamped policy should be trade. Washington should pursue a bilateral trade partnership that emphasizes not only commerce, but also the importance of labor rights, transparency, and countercorruption measures within Bangladesh’s economy.

In addition, American cooperation, whether technological or financial, to bolster Bangladesh’s energy sector would come as a great relief to Dhaka. Bangladesh’s economy is performing as projected due to acute scarcities of power. With a steady growth of urbanization and dwindling indigenous energy sources (mainly in the form of natural gas), Bangladesh thus is badly in need energy assistance—an area Washington can be of great help. The U.S. has a strong interest in greater energy security throughout South Asia, and has advocated for cross-regional pipelines and financed energy projects in Pakistan. Therefore, Bangladesh is a logical next step.

On the political side, Washington should exert pressure on both the ruling party and opposition to take disputes off the streets and on to the negotiating table. Both parties should be encouraged to explore new avenues for peaceful dialogue—such as social media—and other nonviolent means to engage with the masses. If democracy is for the people, then it is virtually absent in Bangladesh where political parties show little interest in being accountable to their constituents.

Democracy in Bangladesh—the embodiment of a moderate Muslim nation—is now imperiled. The United States can no longer be complacent about the nation a famous American secretary of State once notoriously referred to as a “basket case”—yet has now become, despite its economic and democratic achievements, one of the biggest tinderboxes in Asia.

First published in The National Interest, January 27, 2014

Arafat Kabir is a regional politics analyst based in Bangladesh. Follow him @ArafatKabirUpol.

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

Bangladesh and development: The path through the fields

Bangladesh has dysfunctional politics and a stunted private sector. Yet it has been surprisingly good at improving the lives of its poor

DHAKA AND SHIBALOY, MANIKGANJ DISTRICT

ON THE outskirts of the village of Shibaloy, just past the brick factory, the car slows to let a cow lumber out of its way. It is a good sign. Twenty years ago there was no brick factory, or any other industry, in this village 60 kilometres west of Dhaka; there were few cows, and no cars. The road was a raised path too narrow for anything except bicycles.

Now, Shibaloy has just opened its first primary school; it is installing piped water and the young men of the village gather to show off their motorcycles at the tea house. “I have been a microcredit customer for 17 years,” says Romeja, the matriarch of an extended family. “When I started, my house was broken; I slept on the streets. Now I have three cows, an acre of land, solar panels on the roof and 75,000 taka ($920) in fixed-rate deposits.”

Bangladesh was the original development “basket case”, the demeaning term used in Henry Kissinger’s state department for countries that would always depend on aid. Its people are crammed onto a flood plain swept by cyclones and without big mineral and other natural resources. It suffered famines in 1943 and 1974 and military coups in 1975, 1982 and 2007. When it split from Pakistan in 1971 many observers doubted that it could survive as an independent state.

In some ways, those who doubted Bangladesh’s potential were right. Economic growth since the 1970s has been poor; the country’s politics have been unremittingly wretched. Yet over the past 20 years, Bangladesh has made some of the biggest gains in the basic condition of people’s lives ever seen anywhere. Between 1990 and 2010 life expectancy rose by 10 years, from 59 to 69 (see chart 1). Bangladeshis now have a life expectancy four years longer than Indians, despite the Indians being, on average, twice as rich. Even more remarkably, the improvement in life expectancy has been as great among the poor as the rich.

Bangladesh has also made huge gains in education and health. More than 90% of girls enrolled in primary school in 2005, slightly more than boys. That was twice the female enrolment rate in 2000. Infant mortality has more than halved, from 97 deaths per thousand live births in 1990 to 37 per thousand in 2010 (see table). Over the same period child mortality fell by two-thirds and maternal mortality fell by three-quarters. It now stands at 194 deaths per 100,000 births. In 1990 women could expect to live a year less than men; now they can expect to live two years more.

The most dramatic period of improvement in human health in history is often taken to be that of late-19th-century Japan, during the remarkable modernisation of the Meiji transition. Bangladesh’s record on child and maternal mortality has been comparable in scale.

These improvements are not a simple result of increases in people’s income. Bangladesh remains a poor country, with a GDP per head of $1,900 at purchasing-power parity.

For the first decades of its independent history Bangladesh’s economy grew by a paltry 2% a year. Since 1990 its GDP has been rising at a more respectable 5% a year, in real terms. That has helped reduce the percentage of people below the poverty line from 49% in 2000 to 32% in 2010. Still, Bangladeshi growth has been slower than India’s, which for most of the past 20 years grew at around 8% a year. Nevertheless the gains in its development have been greater. The belief that growth brings development with it—the “Washington consensus”—is often criticised on the basis that some countries have had good growth but little poverty reduction. Bangladesh embodies the inverse of that: it has had disproportionate poverty reduction for its amount of growth.

How has it done it?

Four main factors explain this surprising success. First, family planning has empowered women. If you leave aside city states, Bangladesh is the world’s most densely populated country. At independence, its leaders decided that they had to restrain further population growth (China’s one-child policy and India’s forced sterilisation both date from roughly the same time). Fortunately, Bangladesh’s new government lacked the power to be coercive. Instead, birth control was made free and government workers and volunteers fanned out across the country to distribute pills and advice. In 1975, 8% of women of child-bearing age were using contraception (or had partners who were); in 2010 the number was over 60% (see chart 2).

In 1975 the total fertility rate (the average number of children a woman can expect to have during her lifetime) was 6.3. In 1993 it was 3.4. After stalling, it resumed its fall in 2000. After one of the steepest declines in history the fertility rate is now just 2.3, slightly above the “replacement level” at which the population stabilises in the long term. When Bangladesh and Pakistan split in 1971, they each had a population of 65m or so. Bangladesh’s is now around 150m; Pakistan’s is almost 180m.

Because of this Bangladesh is about to reap a “demographic dividend”; the number of people entering adulthood will handsomely exceed the number of children being born, increasing the share of the total population that works.

In giving women better health and more autonomy, family planning was one of a number of factors that improved their lot, and by so doing did much to reduce poverty. The spread of primary education was one of the others (the government has been better than many at helping women this way); the proportion of girls who get schooled has increased much more than the proportion of boys. And both the boom in the textile industry and the arrival of microcredit have, over the past 20 years, put money into women’s pockets—from which it is more likely to be spent on health, education and better food.

Second, Bangladesh managed to restrain the fall in rural household incomes that usually increases extreme poverty in developing countries. Between 1971 and 2010 the rice harvest more than trebled, though the area under cultivation increased by less than 10%. This year the country once supposedly doomed to dependence on food aid could be a small exporter of rice. One-sixth of the population remains undernourished, which is a blight; but it is an improvement on 20 years ago, when more than a third of the population was underweight or stunted.

Yield alone is not the whole story. The new crops of the Green Revolution allowed rice growers to move to two harvests a year. The rice of the Ganges delta used to be monsoon, or aman, rice; it was planted before the annual rains and harvested after. Nowboro rice, planted and harvested in winter, is the main crop. For people just above the poverty line, the sort of event most likely to plunge them into extreme poverty is a sudden external shock, such as an illness or a harvest failure. By expanding the winter crop, boro rice reduces the risk of a harvest failing in a way that shocks a household into abject poverty. Between 2007 and 2012 Bangladesh went through three global food-price spikes and two cyclones. Almost everyone expected a spike in poverty to follow. It did not.

The villages have also found resources from beyond agriculture—and, indeed, beyond Bangladesh. Around 6m Bangladeshis work abroad, mostly in the Middle East, and they remit a larger share of the national income than any other big country gets from migrants. In the year ending in June 2012 they sent back $13 billion, about 14% of annual income—more than all the government’s social-protection programmes put together. The majority of migrant workers send their remittances back to family members in the village they came from. Because emigrants are more likely to come from better off families, those families benefit most. But knock-on effects on rural wages benefit landless labourers. The World Bank calculates that between 2000 and 2010, real agricultural wages rose 59%, compared with 42% for all sectors. Most countries have seen a reduction in rural living standards, and a resultant increase in extreme poverty. Bangladesh has not.

Remittances and family planning have not attacked extreme poverty directly. That is where the government comes in.

Bangladesh comes 120th (out of 183) on the “corruption perceptions index” kept by Transparency International, a think-tank in Berlin. It has had episodes of military rule interrupting periods of democracy in which the “battling begums” (daughter and widow of two early presidents) engaged in a sort of Judy and Judy show of vicious political infighting.

Yet despite the political circus, the country’s elite has maintained a consensus in favour of social programmes. Bangladesh spends a little more than most low-income countries on helping the poor. About 12% of public spending (1.8% of GDP) goes on social safety-nets to protect the poorest: food for work, cash transfers and direct feeding programmes, which most poor countries do not have. As well as spending more on the poor, the state also focuses more than many on the role of women.

That said, the amounts that go on education (2.2% of GDP) and health (3.5%) in Bangladesh are below the average for low-income countries. And even that spending might well have been wasted but for one further influence: the extraordinary role played by non-governmental organisations (NGOs) in the country. Without the state’s schools, clinics and cash-transfer schemes, says Rehman Sobhan, the head of the Centre for Policy Dialogue, a think-tank, other interventions would not work. It is the things which NGOs do, though, that make Bangladesh’s way of fighting poverty unique.

BRAC (which originally stood for Bangladesh Rehabilitation Assistance Committee, but now is the only name the organisation needs) invented the idea of microcredit, that is, tiny loans to the destitute. Then another NGO, Grameen Bank, made them work by targeting them on women and holding weekly meetings of borrowers who would identify and support anyone who was falling behind on repayments. Their growth since has been explosive. Grameen has 8.4m borrowers and outstanding loans of over $1 billion; BRAC has 5m borrowers and loans of $725m. The poor account for roughly a fifth of the total loan portfolio of the country, an unusually high proportion.

Since their establishment, microcredits have spread around the world. Their benefits have been both exaggerated and attacked. The backlash has shown that microcredits have not, as some claimed, led to a surge of entrepreneurial activity. In some cases they have left borrowers worse off than before. Their impact in the land of their birth, though, has been mostly positive. Mohammad Razzaque of Dhaka University looked at two groups of people with similar incomes and household assets, one of which contained regular borrowers from a variety of microfinance institutions and the other of which did not, to see whether microcredit helped. Among the first group the poverty rate fell ten percentage points, from 78% in 1998 to 68% in 2004. Among the second, poverty still fell, but only half as much, from 75% to 70%.

The magic ingredient

The real magic of Bangladesh, though, was not microfinance but BRAC—and NGOs more generally. The government of Bangladesh has been unusually friendly to NGOs, perhaps because, to begin with, it realised it needed all the help it could get.

BRAC began life distributing emergency aid in a corner of eastern Bangladesh after the war of independence. It is now the largest NGO in the world by the number of employees and the number of people it has helped (three-quarters of all Bangladeshis have benefited in one way or another). Unlike Grameen, which is mainly a microfinance and savings operation, BRAC does practically everything. In the 1980s it sent out volunteers to every household in the country showing mothers how to mix salt, sugar and water in the right proportions to rehydrate a child suffering from diarrhoea. This probably did more to lower child mortality in the country than anything else. BRAC and the government jointly ran a huge programme to inoculate every Bangladeshi against tuberculosis. BRAC’s primary schools are a safety net for children who drop out of state schools. BRAC even has the world’s largest legal-aid programme: there are more BRAC legal centres than police stations in Bangladesh.

The scale is a response to one of the biggest challenges of development: that solving one problem leads to others. This happens in economic development as well as the social kind. In the 1950s South Korea’s Samsung had a big woollen mill. It found that to expand, it had to make its own textile machinery; then, to export, it built its own ships; and so on. Samsung now has around 80 companies and is the world’s largest information-technology firm. BRAC is a sort of chaebol (South Korean conglomerate)for social development. It began with microcredit, but found its poor clients could not sell the milk and eggs produced by the animals they had bought. So BRAC got into food processing. When it found the most destitute were too poor for micro-loans, it set up a programme which gave them animals. Now it runs dairies, a packaging business, a hybrid-seed producer, textile plants and its own shops—as well as schools for dropouts, clinics and sanitation plants.

The innovative NGO now has 100,000 health volunteers with mobile phones (mobile-phone coverage is widespread in Bangladesh). When a volunteer finds a woman is pregnant, she texts the mother-to-be with advice on prenatal and, later, postnatal care. This is helping BRAC build up a database of maternal and child-health patterns in remote villages.

BRAC goes out of its way to involve everyone. When it set up a programme for the ultra-poor in Shibaloy, the whole village gathered to decide who should be eligible. They drew a map of the households in the dirt so everyone could see who was involved and ensure that nobody was missed (the same process, in a different village, is pictured below). BRAC argues that such things encourage a sense of ownership of the programmes and reduces waste and corruption.

A balance-sheet

Bangladesh still has formidable problems. Its nutritional standards are low and stalled for a few years in the early 2000s. While the government has managed to increase school enrolment, the quality of education is abysmal and the drop-out rate exceptionally high (only 60% of pupils complete primary school, much less than the regional average). Only a quarter of eleven-year-olds have reached the required standards of literacy and numeracy.

Most of the big improvements have taken place in rural areas, but Bangladesh is urbanising fast, which will bring a different suite of problems. Dhaka is one of the ten largest cities in the world, but has the infrastructure of a one-buffalo town.

And as if all that were not enough, the government seems intent on killing one of the geese that lays the golden eggs. Incensed that the founder of Grameen Bank, Muhammad Yunus, should have had the temerity to start a political party, the prime minister, Sheikh Hasina, has hounded him from his position as the bank’s managing director and is seeking to impose her own choice of boss on the bank, overriding the interests of the owner-borrowers. This is sending a chilling signal to other NGOs.

But Bangladesh’s record is, on balance, a good one. It shows that the benefits of making women central to development are huge. It suggests that migration is not just the result of a failure to provide jobs at home but can be an engine of economic growth. Indian’s rural-development minister, Jairam Ramesh, said recently that “Bangladesh’s experience shows…that we don’t have to wait for…high economic growth to trigger social transformations. Robust grass-roots institutions can achieve much that money can’t buy.”

Bangladesh is still poor and crowded. With the lowest labour costs in the world (textile workers make about $35 a month) it should be growing faster than China, not more slowly than India. It is badly governed, stifled by red tape and faces severe environmental problems. But in terms of the success of its grass-roots development, it has lessons for the world.

First published in the Economist, November 3rd 2012

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

The Female Factor: Success in a Land Known for Disasters

Photo: Munem Wasif for the International Herald Tribune: Nur Jahan cared for a relative at a hospital. Ms. Jahan worked on a road maintenance crew for two years and hopes to one day run for a local government position.

BETTINA WASSENER

SOMESHPUR, Bangladesh — To many outsiders, Bangladesh is best known for its poverty and the natural disasters that hit it with depressing regularity.

When it comes to the position of women, however, this country has made progress that would be unthinkable in many other Muslim societies. Bangladeshi women have served in U.N. peacekeeping missions. There are women ambassadors, doctors, engineers and pilots. Two powerful women — the prime minister, Sheikh Hasina, and her political rival, Khaleda Zia — have been alternating at the country’s helm for years. The proportion of parliamentary seats held by women is 19.7 percent, not much lower than the 22.3 percent in the British House of Commons.

“This is a country where women are active in every field,” Dipu Moni, the minister of foreign affairs, said at her office in Dhaka, the capital. Ms. Moni, the daughter of a prominent politician and a Western-educated lawyer and physician, has campaigned for years for women’s rights and improved health provisions in the country.

Such efforts by successive governments and development organizations have led to major improvements in the lives of women across the country, with expanded access to health care and basic education in rural and urban areas. Decades of microlending and, more recently, the burgeoning garment sector have underpinned the progress by turning millions of women into breadwinners for their families.

Nur Jahan, who lives in Someshpur, a ramshackle village of about 1,000 people four hours from Dhaka, illustrates how tough life remains for many Bangladeshi women, but also how many women’s lives are transforming.

Ms. Jahan’s husband abandoned her, penniless and in rags, on the main square of Someshpur when she was pregnant with her second child about 10 years ago. A compact and vivacious woman who is about 26 years old — no one keeps exact records — Ms. Jahan spent years doing odd jobs for other households to keep herself and her children above water. In a country that ranks as one of the poorest in the world, she was about as low as it is possible to get.

Then, two years ago, luck finally arrived, in the form of a development project that arranged for women who had been widowed or left by their husbands to get jobs maintaining roads in the vicinity.

The project, funded by the European Union and the U.N. Development Program, and implemented with the assistance of local governments, helped about 24,400 women like Ms. Jahan across Bangladesh.

For two years, they cleared shrubs and smoothed surfaces. They were paid 100 taka, or about $1.20, a day. But the savings they accumulated allowed many of them to buy a plot of land or a humble dwelling. In addition, they were taught to start tiny businesses that should allow them to make a living going forward.

Ms. Jahan now makes and sells compost, and trades dried fish. Others in the village sell wood, cookies or stationery for a slim profit. One became the proud owner of a hand loom. Instead of being destitute, these women are now merely poor. They can afford to eat and to send their children to school.

Ms. Jahan hopes to run for a local government position in a few years. Already, people come to her for help, she explained proudly. Recently, the relatives of a sick neighbor asked her to accompany them to the local clinic. Before, they would have hardly looked at her.

“When I think about my past, I want to cry,” she said. “When I think about life now, it is nothing but smiles.”

The roots of much of the development work were laid in the aftermath of the Bangladeshi war for independence from Pakistan in 1971. What started off as efforts to support the tens of thousands of women who were widowed during the fighting was later expanded into much wider efforts to alleviate poverty and facilitate women’s empowerment, said Ferdousi Sultana Begum, senior social development officer at the Asian Development Bank in Dhaka.

“There is still a long way to go, but there has been a lot of gradual progress, especially over the past two decades,” she said. Girls’ education, in particular, has been embraced widely, she added.

Statistics, too, underline the improvement in women’s lives. The number of births by teenage mothers, for example, plummeted to 78.9 per 1,000 in 2010 from 130.5 in 2000. That is still high by Western standards (the figure for the United States is 41.2), but it is below the 86.3 recorded in India.

Fewer babies die in Bangladesh than in India: 52 out of 1,000, compared with 66 in India and 87 in Pakistan.

And population growth has been stemmed. In the late 1980s, women in Bangladesh had on average 5.1 children. By 2009, the rate had been more than halved, to 2.3. India has a rate of 2.7, according to the World Bank.

The progress comes despite the toughest of backdrops. Over all, Bangladesh ranks 146th of 187 countries on an index measuring human development compiled by the U.N. Development Program — ahead of Myanmar and many African countries but behind Iraq. Nearly one-third of the population lives in poverty. Corruption, red tape and poor infrastructure mar everyday life. Access to clean water and electricity is scarce in the villages that dot the flat landscape of the country, whose 160 million inhabitants squeeze into an area smaller than Florida and larger than Greece.

Conservative traditions are deeply enshrined in this country, where about 70 percent of the population lives in the countryside. There are frequent reports of domestic violence, often related to demands for dowry payments. And many women who have achieved top leadership positions owe their prominence in part to powerful male relatives.

But while women in many other Muslim nations are seeing their rights eroded by the rise of conservative Islamism, this is not the case in Bangladesh. Extremism is a fringe phenomenon, and women’s development projects encounter little religious opposition.

The country is predominantly Muslim, but moderate; Buddhist and Hindu traditions are widely respected, and there is a widespread acceptance of the concept that women can work outside the home.

Microlending, which took off in the 1980s, has allowed many women to start tiny businesses over the years.

More recently, millions of people have found work in the garment sector, which accounts for about three-quarters of exports from Bangladesh.

At the Mustafa Garments Industries factory in the southeastern port city of Chittagong, hundreds of women, most in their 20s and early 30s, were recently bent over sewing machines and cutting tables, making shorts for customers in the United States and Europe.

The factory employs about 500 people — 95 percent of them women — who earn between 4,500 and 5,000 taka a month, according to Kallol Majumder, the general manager. That is about $2 a day — but even that gives them breadwinner status. And it underlines the fact that women in Bangladesh are not simply recipients of Western charity, but active economic agents in their own right.

“Bangladesh is undergoing a structural change in the economy, from agricultural to manufacturing,” said Stefan Priesner, the U.N. Development Program country director in Dhaka. “Women have played a huge role in this.”

On the education front, men still outnumber women in universities. But the number of women enrolling has risen steadily. In an attempt to help redress the balance, a women-only university was set up in Chittagong in 2008.

Kamal Ahmad, a Bangladeshi who worked for many years in development organizations and as a lawyer in the United States and Britain, spent years raising donations and lobbying the government for land for the university. The goal for the Asian University for Women, he said, is to create women leaders capable of bringing about change across Asia.

The first class is expected to graduate next year, and many of the students already have plans to set up businesses, campaign groups, banks or schools in their 12 respective home countries.

“I have a real responsibility to help social progress,” said Moumita Basak, a bubbly 21-year-old from Chittagong. Her goal: to become a writer, and set up organizations aimed at promoting social causes.

First published in The New York Times, New York, USA, April 9, 2012

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