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BANGLADESH: Govt Under Pressure After Sacking Yunus

Farid Ahmed

DHAKA, Mar 4 2011 (IPS) - The Bangladesh government is drawing flak from the international community for removing microcredit pioneer and Nobel laureate Muhammad Yunus from the Grameen Bank that he founded and led.

The Central Bank of Bangladesh on Wednesday removed Yunus, 70, from his post as the managing director of the Grameen Bank, stating that he had overstayed. He was “unlawfully” holding the position that he should have relinquished 10 years ago, a top bank official said.

Yunus challenged the legality of the order a day later, while his supporters closer home and abroad questioned the government’s intent and the process it followed.

“The central bank has removed Professor Yunus as managing director of the bank and I’ll act accordingly under the bank’s law,” said Muzammel Huq, chairman of the board of directors of the Grameen Bank. He had recently been appointed by the government, that holds 25 percent stake in the bank. Huq told IPS that the deputy managing director will hold the bank’s top post in the interim.

Yunus ignored the order and joined work on Thursday at the Grameen Bank headquarters in Dhaka and stayed till late evening, the bank’s spokeswoman Jannat-E-Quanine said.

“Grameen Bank is taking legal advice,” the bank stated on its website on Wednesday, adding that the institution has been complying with all applicable laws. “It has also complied with the law in respect of appointment of the Managing Director. According to the Bank’s legal advisors, the founder of Grameen Bank, Nobel Laureate Professor Muhammad Yunus, is accordingly continuing in his office,” the statement added.

An economics professor known as the “banker to the poor”, Yunus founded the Grameen Bank in 1983. It attracted worldwide attention for its easy, small credit to unemployed women who cannot give any collateral. The model was replicated across the world as an anti-poverty measure, earning Yunus and the bank the Nobel Peace Prize in 2006.

Prof Anu Muhammad, who teaches economics at Janhangirnagar University, a critic of microcredit, told IPS that the government move was aimed at discrediting Yunus. “If age is an issue, why did the central bank wait for 10 years?” he asked. “I don’t believe the move has a good intention…it can’t change the lot of the people mired in poverty and caught in the vicious cycle of debts.”

Many believe Bangladesh Prime Minister Sheikh Hasina is unhappy with Yunus.

Last November, a Norwegian television documentary raked up an old controversy of the Grameen Bank transferring aid money from Norway to another Grameen entity to avoid tax under changed norms in the 1990s.

Though the Norwegian government in December cleared the charges, the Bangladesh government formed a committee to review the bank’s activities.

In January Hasina accused Yunus of playing a “trick” to evade tax and charged micro-lenders with “sucking blood from the poor in the name of poverty alleviation.”

Observers feel this statement could have come in retaliation to earlier criticism by Yunus. Soon after a military-backed interim government came to power four years ago amidst violence, Yunus told the French news agency AFP that politicians were in “power to make money.”

Yunus also tried to launch a political party when leading politicians were either on the run or behind bars on corruption charges. His party never took off.

Sheikh Hasina, who was jailed by the military-backed interim government, won a landslide victory in the general elections in December 2008 and formed the government.

Yunus recently fought a defamation case over his statement and faced two fraud charges for which he had to seek bail. He said that the charges were politically motivated.

Friends of Grameen, an international alliance led by former Irish president Mary Robinson, last month alleged that the Yunus was being subjected to “politically orchestrated vilification.”

Norwegian international development minister Erik Solheim deplored the sacking of Yunus: “This is a very sad development. What we see is a brutal internal power struggle in Bangladesh,” he said in an interview with the Norwegian news agency NTB.

Bangladesh Finance Minister Abul Mal Abdul Muhith met foreign diplomats on Thursday to explain the rationale for the action against Yunus. He later told journalists that it did dent the country’s image, but the government had no other option. He insisted that there was no vendetta behind the action.

“We have called his attention to the issue several times. The central bank also sent letters in this regard but to no avail,” he said.

U.S. ambassador to Bangladesh James F Moriarty told reporters after his meeting with the minister: “The United States is deeply troubled. Both Professor Yunus and the government can find a way now and work out their disagreements.”

Meanwhile former military dictator, H.M. Ershad, a major ally of the ruling party, made a press statement supporting Yunus: “Humiliating a man of his stature in his own country would bring the country no honour.”

After the court hearing of his petition challenging his removal on Thursday Yunus told reporters: “It’s not a big deal who is the managing director of Grameen Bank…the bank which has about eight million beneficiaries across the country should not be affected in any way.”

 
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