Sheikh Hasina's Assault on Grameen Bank

Muhammad Yunus, who founded the pioneering microlender Grameen Bank, is finding himself under increasing attack from Bangladesh Prime Minister Sheikh Hasina, who has ordered a four-member commission to investigate 54 businesses founded by the Nobel Laureate.

There is rising concern that the government will seek to privatize both Grameen Bank and the scores of affiliated companies that Yunus started, which Yunus, in a 12-page open letter, said would cause a disaster.

In March 2011, Bangladesh's Central Bank ordered Yunus sacked, ostensibly because of his age, as the managing director of Grameen, which he founded to make funds available to poor women. Despite international publicity and entreaties to keep the 71-year-old founder in his job, the government prevailed and Yunus was forced out of the bank.

Sources in the Bangladeshi capital of Dhaka told Asia Sentinel at the time that Sheikh Hasina waged a campaign to drive Yunus out partly because of jealousy at his status as Bangladesh’s most prominent citizen. Hasina, the sources said, thought she should have been awarded the 2007 Nobel Peace Prize instead of Yunus because of her work in solving regional conflicts.

Other sources say the banker earned her enmity by first participating with other Bangladeshi civil society members in a campaign calling for honest and clean candidates for national elections, then seeking to start an independent political party, although he later abandoned that plan.

The controversy over Yunus stirred media attention from across the world in 2011, with a long string of international organizations and individuals appealing to the government stop Yunus’s ouster including former Ireland President Mary Robinson and former World Bank president James Wolfensohn. Last week, US Secretary of State Hilary Clinton in early May 2012 visited Bangladesh to ask that Bangladesh not "undermine and interfere" in Grameen’s effectiveness.

"We do not want to see any action taken that would in any way undermine or interfere in the operations of the Grameen Bank or its unique organizational structure where the poor women themselves are the owners," Clinton said, Government officials told Clinton to mind her own business.

The naming of the commission came after the Finance Minister Abdul Maal Abdul Muhith said the bank's board had not authorized most of the affiliates. A Finance Ministry statement on Wednesday said the commission will suggest "future steps to be taken about Grameen Bank and its affiliates." It will be headed by a former government official and must submit a report in three months. According to AFP, the statement did not provide details of the tasks of the commission. Muhith said earlier that the Grameen affiliates would be probed as to how they could be regulated.

In his statement released late last week, Yunus accused the government of attempting to take over the bank and saying that “To imagine Grameen Bank as a government bank is itself a scary thought. Grameen Bank is an institution built on strict discipline. If Grameen Bank is transformed into a government institution, that discipline will start eroding very fast. Grameen bank has 24,000 thousand dedicated, hard-working employees who travel through the narrow village roads, whilst carrying at least 30,000 to 40,000 Taka (US$366-488) in cash. One can wonder how much of this money will be deposited with the bank, and how much of it will vanish into thin air when its administration and supervision become weak.

“Paying bribes for everything may become routine reality—paying bribe to get a loan, paying bribe for buying postings and promotions, paying bribes to enter into a Grameen Bank group, etc. may become the order of the day. Women may no longer be majority of the borrowers any more. These are all nightmares. Just as dreams can become reality, nightmares too can become reality. We must take firm steps so that this nightmare does not get a chance to become a reality.”

He called the thought of Grameen being taken over by the government “a frightening thought.” Yunus said he had established many of the companies the government now wants to investigate on his own initiative as non-profit firms to attempt to solve educational, health and other problems.

“Each of the companies I created was designed to address a specific problem of the poor.

It became a habit for me to create companies to address a social problem. I wanted to make sure that each initiative to solve a problem would become self-reliant. It should be able to operate with its own earnings; it must not be financially dependent on others.

Also, I believed that each company should be structurally independent so that if one company goes down, it cannot pull down the others with it. I tried to solve problems using innovative business ideas, new concepts and new methods.“