Showing posts with label Sheikh Hasina. Show all posts
Showing posts with label Sheikh Hasina. Show all posts

Friday, April 01, 2011

Grameen Under Attack At Home

Muhammad Yunus, founder of Grameen BankImage via Wikipedia
New York Times: Opinionator: Microfinance Under Fire: Both the bank and Yunus, have come under attack by the government of Bangladesh and its prime minister, Sheikh Hasina Wazed. It has taken 35 years of painstaking effort to build Grameen into a world-class institution that serves millions of poor people. That progress could be lost if the country’s leaders fail to appreciate what makes the Grameen Bank work........ The Grameen Bank is not just the largest microlender in the world, with 8.4 million borrowers (most of them women villagers) who received more than $1 billion in loans last year, it is the flagship enterprise in an industry that, in 2009, served 128 million of the world’s poorest families. ...... Yunus, the founder of the bank, is an entrepreneurial figure cut from the same cloth as Steve Jobs, the founder of Apple. He has devoted himself since the 1970s to demonstrating, institutionalizing and spreading microfinance. ...... Legally, the government owns 25 percent of Grameen and has the right to appoint a quarter of its board members, including its chairperson. In practical terms, however, the government has little justification to intercede in the bank’s operations. Today, of the Grameen Bank’s paid-up share capital, only 3.5 percent comes from the Bangladeshi government. It is the bank’s borrowers who are its majority owners. They control 75 percent of the board seats and they have supplied 96.5 percent of the paid up share capital. And it’s the savings of villagers — about $1.5 billion — that now finances the bank’s activities and growth. ......... Nevertheless, the government is proceeding to remove Yunus against the objections of its majority owners and will probably succeed. ...... Yunus is being punished for criticizing the government and making a bid to start a political party in 2007. ......... The Grameen Bank is a strong, well-managed institution with 25,000 employees. It could probably withstand his departure. Indeed, given Yunus’s age, it’s critical to pave the way for a successor. But if he is replaced in a manner that diminishes confidence, the bank could face problems. ........ the Grameen Bank depends on unusually high levels of motivation among its staff and high levels of trust among its borrowers. A forced removal of Yunus that is seen as illegitimate, politically-motivated, or vindictive could alienate thousands of employees and trigger a run on savings or loan defaults. ......... The state-owned banks have regularly extended loans to elite borrowers (who default at high rates) as a form of patronage. Unlike Grameen, which is financially self-sufficient, the state banks are perpetually in need of cash infusions from the government. ........ The Prime Minister has made it clear that she believes the interest rates are too high. ...... if the government installed a bureaucratic manager who failed to appreciate the bank’s 
Bangladeshi Prime Minister Sheikh HasinaImage via Wikipediaentrepreneurial culture, it could suck the life out of the bank. ....... Before Grameen Bank workers get hired, for example, they spend close to a year demonstrating their interest in serving the poor. They have to do things like write detailed case studies about the lives of village women to show that they genuinely care about, and understand, their clients. Managing this workforce is nothing like managing a run-of-the-mill bank. ........ Over the past few months, officials have sought to damage Yunus’s reputation, claiming without evidence that he has enriched himself at the expense of the poor, intentionally harmed borrowers, and engaged in fraud. The prime minister has called microlenders loan sharks “sucking the blood of the poor.” Her son circulated a letter which contained a litany of unfounded accusations against Yunus — the most outrageous being that the government created the Grameen Bank, not Yunus. ......... It’s not as if Bangladesh is lacking real problems that require government attention. There can be no sense in destabilizing the leading institution in an industry that provides financing to more than half of the households in the country. ........ On March 15, the Bangladeshi Supreme Court postponed ruling on Yunus’s case for two weeks........ Given that Yunus understands Grameen’s culture better than anyone, he should have a key say in any leadership change. ........ Wise governments should view microfinance programs not as adversaries, but as partners in furthering public goals — organizations that need to be regulated, but not controlled. ...... Foreign governments and multi-lateral institutions have invested hundreds of millions of dollars in the Grameen Bank and other large microfinance organizations in Bangladesh, and elsewhere, with the goal of alleviating poverty. They also need to remember that it’s not enough to finance development organizations. They need to protect them, too.

Sunday, March 27, 2011

Jagdish Bhagwati: Misplaced Criticism Of Yunus

Jagdish Bhagwati - World Economic Forum Annual...Image by World Economic Forum via FlickrThere is no doubt that Yunus has done pioneering work in the field of microfinance. It is not that others have not, but I do think he deserved the Nobel Peace Prize he was awarded. Not only did he do pioneering work, he scaled it. The Grameen Bank is huge in size.

But if Jagdish Bhagwati gives Yunus less credit than I would like to, I don't have issues with that. That is a matter of difference in opinion.

What I do have issues with is where Bhagwati pours down a dozen paragraphs siding with Sheikh Hasina in her crusade against Yunus, and then concludes in the final paragraph by saying good governance plays a more central role in poverty alleviation than does microfinance, something I agree with. I'd put good governance, education, health, infrastructure, job creation, and microcredit, in that order.

Monday, February 14, 2011

Leave Yunus Alone

Rabindranath Tagore won the Nobel prize for li...Image via WikipediaThe Stink From The New York Times
Nazrul Islam Chunnu: Motherfucker
Telegraph: Bangladeshi leaders decide Nobel financier Mohammad Yunus must go: Professor Yunus is Bangladesh's most respected international figure ..... Prof Yunus was now too old and that the government wants to redefine the bank’s role and bring it under closer regulation. ..... the government of Sheikh Hasina, which, according to Western diplomats, regards his international profile as a political threat. ..... The government’s stance also sets it on a collision course with Western governments, aid and finance organisations ..... Hillary Clinton has voiced her fears that Grameen Bank’s independence is under threat ..... former Ireland president Mary Robinson and former World Bank president James Wolfensohn, launched Friends of Grameen to save the bank from a government takeover. ..... Yunus said the government wanted to take control of the bank from its 8m borrowers and savers ..... The bank’s borrowers and savers own 75pc of the company, while the government has a 25pc stake. According to the bank, it lends $1bn every year while lifting 5pc of its borrowers out of poverty. ...... Sheikh Hasina, who said the bank was “sucking money” from the poor and using them as “pawns to get more aid”. ..... Yunus said government control would lead to the bank being used to help “win elections” and fuel corruption and that he would not step down until the government promised to maintain the bank’s independence and mission to help the poor
This is like Putin going after that businessman dude in Russia. This is a severe abuse of state power. While they are at it, the Bengalis should go ahead and disrespect Rabindranath Tagore as well. This is insane.