Bangladesh PM’s Vendetta Against Grameen Bank’s Yunus

In 2012, the World Bank pulled out of its US$1.2 billion commitment to fund Bangladesh’s biggest infrastructure project, a 6.1 km. multimodal bridge over the Padma River, because of clear evidence of high-level corruption. But when Bank officials went to the government, they were ignored.

Today, however, Bangladesh Prime Minister Sheikh Hasina Wazed is charging that World Bank officials acting at the behest of the family of former US President Bill Clinton attempted to blackmail her into allowing former Grameen Bank President Muhammad Yunus to return to the bank, or the World Bank’s portion of the funding for the US$3 billion Padma Bridge, the country’s biggest, would be turned off.

The World Bank decision to pull out of the project, which is now about 25 percent completed, forced Bangladesh to find other funding sources. The bank said it had found a high-level corruption conspiracy among Bangladeshi government officials, the Canada-based SNC-Lavalin executives, and private individuals.

“The World Bank cannot, should not, and will not turn a blind eye to evidence of corruption,” the bank said when it cancelled the loan. “We have both an ethical obligation and a fiduciary responsibility to our shareholders and IDA donor countries. It is our responsibility to make sure IDA resources are used for their intended purposes and that we only finance a project when we have adequate assurances that we can do so in a clean and transparent way. In light of the inadequate response by the Government of Bangladesh, the World Bank has decided to cancel its $1.2 billion IDA credit in support of the Padma Multipurpose Bridge project, effective immediately.

Sheikh Hasina had another reasons. “Some high officials from the USA told me that funding would be stopped if a particular person is not there in the post,” Hasina told a crowd at Shilpakala Academy in Dhaka on Jan. 16, without mentioning either Yunus, who was awarded the 2006 Nobel Prize for Peace, or Grameen. But her meaning was clear.

The veteran politician, who leads the Awami League, asserted that Yunus had influenced the World Bank management to cancel financial support for the 6.1 km bridge, which is being built with funds from the Asian Development Bank (US$615 million), the Japan International Cooperation Agency (US$415 million) and the Islamic Development Bank (US$140 million).

“Even I was directly threatened,” Hasina said, charging that Yunus had violated Bangladeshi banking laws by staying on for 10 years past state-mandated retirement despite the fact that such rules apply only to government banks. If anyone failed to win in the court that is not our responsibility…Could the construction of the Padma bridge be stopped for that?”

The bridge is perhaps the country’s most ambitious infrastructure undertaking, designed to handle both car and train traffic as well as providing a conduit for communications and other purposes across a river that is a major tributary over the Ganges. The country’s first major fixed river crossing, it also includes more than 15 km. of approach structures as well.

Hasina has been on a crusade against Yunis for a decade out of jealousy, her detractors say, because she believed she should have won the 2006 Nobel Prize for her work in stopping an internecine war among Bangladesh’s hill tribes instead of Yunus

For whatever reason, Yunus was compelled to resign as the managing director of Grameen Bank in March 2011 on the ground that the banker to the poor, who gained fame for his development of microfinance, which has enabled millions of poor to move out of poverty, had crossed the official age limit (60 years). Although Yunus appealed to the country’s top court, he was turned down. Later, Hasina moved against the bank itself, rewriting the law to add government-appointed directors to control it.

“There was huge pressure on my government to reinstate him as the managing director. But I did not bow down,” she asserted.

Although it was an oblique reference, the Yunus Center immediately hit back at the prime minister, alleging that she is continuing a smear campaign against him. The center, which functions as Yunus’s secretariat, issued a statement saying “We are saddened and frustrated by the baseless remarks made by the Honorable Prime Minister,” adding that the charge that Yunus had encouraged the World Bank to cancel the loan was baseless.

“Prof. Yunus has dedicated his whole life to building various institutions for the welfare of the people of Bangladesh and would never do anything against the interest of the people of Bangladesh. Such an unfair and unfounded smear campaign to discredit one of the most respected and celebrated Bangladeshis and his work is unfortunate,” the statement said.

Yunus, the center said, had long ago denied he had anything to do with the Padma Bridge matter. “It is shocking that the Honorable PM keeps repeating the allegation without ever presenting any proof in support.”

The Grameen Bank is 97 percent owned by the Bangladeshi women who became shareholders after taking out loans. The remainder is held by the government. The bank provides small loans without collateral. Many socio-political analysts argue that the bank’s elevated fame of the unique bank annoyed Hasina as she was often introduced the premier of the land of Muhammad Yunus. She maintained her suspicion that Yunus received the Nobel Prize because of the Clinton family’s lobbying the Nobel committee.

The Prime Minister directed the same allegation against Yunus in the Jatiya Sansad, the National Parliament, while responding to a parliamentarian’s query, saying “domestic evil forces” were running negative propaganda against the poverty-stricken country, adding that “there were unprecedented efforts to attach the stigma of corruption to her government,” with her and her family the prime target.

Later, in a cabinet meeting, Hasina charged Yunus with conspiring against her government. After the local media reported the premier’s comment, the Yunus Center issued another formal protest against her remark that the banker was waiting for Hillary Clinton to become the next US President to create more troubles to her government.

“The theory (that Yunus is plotting to bring down the government of Bangladesh when she becomes the US President) is stretching the imagination to the limit. Implicating a front-running Presidential contender of a friendly country with such a serious accusation does not promise our country a good start with the new President if she is elected,” the statement said.

“No doubt, Prof Yunus is close to the Clinton family, even before Bill Clinton became the US President. US presidential hopeful Hillary Clinton, who visited Dhaka as the US Secretary of State, also publicly asked PM Hasina to resolve the conflict with Prof Yunus,” said Hasanur Rahman, a Dhaka based political analyst. “But because of that proximity, one should not blame Prof Yunus as a conspirator to a national project engaging the American lady. “I believe, both Prof Yunus and Ms Clinton must have maintained the basic minimum honesty in their interaction and actions.”