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Yunus and after: Grameen Bank will be a political liability for the Government April 9, 2011

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Government has almost achieved what he intended to achieve that is to remove Dr. Yunus from the post of Managing Director of Grameen Bank. Whatever the reason behind the move, it will be a matter of past. But new issue will come up and will link it with the past.

What steps government takes to run the GB smoothly, will be the next issue to observe. It will be important not only to the political observers but more to the borrowers-shareholders of the bank. As because the issue is so much discussed nationally and internationally, international communities and micro-credit pundits will also observe the move.

Grameen Bank is a unique bank in structure and function, baptized in 1983 by a presidential ordinance. It has grown up into a huge financial institution with 83.3 lac borrowers with a branch in every village of the country.

One of the uniqueness of GB is that it’s borrowers are it’s shareholders. It is difficult to conceive how the borrowers could be the shareholder and the question is asked by a minister. The borrowers have to put a part of their borrowed money as obligatory deposit to the bank and GB incorporates them as the shareholders of the bank.

The money lending and money collecting system are also unique. Grameen lends money without collateral, but not an individual but to a member of a group where the group acts as the guarantor. Repay system is weekly. Grameen staff goes to door to door and collect the money. All these indicate a very strong organizational system,committed management and competent leadership.
It will be hard for the government to render that leadership and the management will become corrupt soon and the system will be disorganized.

Board of Directors of Grameen is composed of 12 members, 9 elected from borrowers-shareholders and 3 nominated from the government and headed by a chairman, nominated by the government. Board of Directors appoints the Managing Director and Bangladesh Bank approves it. Government has already appointed a chairman, how competent, time will only prove. Grameen Board of Directors are illiterate-commented a minister. I am not sure whether they will appoint more educated new directors on the board violating the constitution or changing it. But lest not we forget that these illiterate leaders of Grameen brought the Nobel peace prize to the bank. Any move to replace them, will cause the borrowers to lose their confidence in the management.

Losing trust of the borrowers will make AL-led government to pay the price politically in near future.

An ordinary citizen

Dr. Muhammad Yunus: Bangladesh new antihero? March 18, 2011

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Dr. Muhammad Yunus is struggling with the government and the court for his post of managing director of Grameen Bank. His personal appeal to the finance minister and explanation to the Bangladesh Bank all went in vein. His appeal to the High Court has been rejected. His counsels compelled to take the refuge to the Supreme court. After hearing on the first day from Dr. Kamal Hussain on merit of the case, supreme court suspends the case for 15 days. The attempts taken by Dr. Yunus, his counsels and Board of Directors so far couldn’t tilt the determination of the government to reconsider its decision.

A parallel current is also flowing at the same time. The board of directors , the borrowers and the beneficiaries of Grameen stand by the side of Dr. Yunus. They are not small in number. About 4 crore people are directly or indirectly connected with Grameen Bank. They are expressing their support for Dr.Yunus and worry for Grameen.

The citizens are reassessing the contribution of Grameen to the economy and judging the commitment and character of Dr. Yunus against the contemporary politicians.

Are the people of Bangladesh reinventing their lost hope in Dr. Yunus?

Is Dr. Yunus Bangladesh new antihero?

An ordinary citizen

The Need for Statesmanship-Rehman Sobhan March 15, 2011

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Rehman Sobhan, the Chairman of Centre for Policy Dialogue, a think tank for Bangladesh policy issues has presented a discourse that published in the Daily Star on the present complicacies related to Grameen and Dr. Yunus and has outlined a way out from the present situation for the consideration of the Prime Minister herself.
The article is worth reading. It is one of the finest on the issue. Following is the concluding part of the article:

From confrontation to statesmanship

‘The spokespersons for the government, in their recent public pronouncements, have stated that the government has no political quarrel with Yunus. All they wanted to do was to preserve the rule of law. I would like to take these declarations on behalf of the government at their face value. If, indeed, the only issue was the rule of law then the principal deviation from the law, as cited in the Bangladesh Bank order, was the failure of the Grameen Bank to seek prior approval of the Bangladesh Bank in their reappointment of Yunus as managing director in 1999. The Bangladesh Bank raised this issue in its Annual Audit Report of Grameen Bank, which gave a full reply to the queries in the Report.

If the Grameen Bank’s reply was at all problematic for Bangladesh Bank or the GoB, the Bangladesh Bank could easily have sent further notices to the Grameen Bank to formally correct such a legal anomaly. The Bangladesh Bank, during the tenure of three democratic governments, two caretaker governments and four governors who held office from 1999 to 2011, sent no further notices to Grameen Bank. This sustained silence by the Bangladesh Bank was quite reasonably interpreted by Grameen Bank as the acceptance of their response to Bangladesh Bank’s audit report and the validation of the Board’s decision on their continuation of Yunus’s appointment as managing director.

Even today, there was nothing to prevent the Governor of the Bangladesh Bank from sending such a notice to Grameen Bank before seeking to remove Yunus from office. Grameen Bank could have explained its actions and/or it could have sought an approval for the continuance of the appointment of Yunus. The Bangladesh Bank could then have accorded its approval if it thought that Prof. Yunus was running the bank efficiently, based on positive reports of the Bangladesh Bank audits of Grameen Bank over the last 12 years. Why such a sensible step was not taken needs explanation. We are, consequently, witnessing these legal encounters which do not greatly enhance the credibility of our institutions of governance nor are they likely to resolve this needless crisis.

So where do we go from here? Given the historic role of Yunus to the development of Grameen Bank, the confidence he generates among its investors and the corporate asset value of his name, such observations as indicated by the finance minister or the Local Government Minister, Ashraful Islam or even by Yunus himself, of providing Yunus with an “honourable exit” from the Bank, appear to overlook the central issue, which is the well being of the Grameen Bank and the livelihood of its millions of members. About the last thing anyone with the best interests of the Bank and its 8 million members in mind, would want is the “exit,” graceful or otherwise, of Yunus from Grameen Bank.

Any precipitate move to oust its founder could shake the confidence of its members in the Bank and expose it not just to a withdrawal of their savings but even a default on their debts. Such a run on Grameen Bank could have a contagion effect which could jeopardise the financial stability of other micro-finance institutions across the country. The relevant issue to be resolved is, therefore, not Yunus’s exit but the terms and conditions which should govern his continuing role in Grameen Bank until he chooses to withdraw from any institutional involvements.

Under the prevailing circumstances what may be a sensible way forward? Prof. Yunus has already suggested such a path. At the age of 70 Yunus still has the energy and creativity of a young man. Even if he were to withdraw completely from Grameen Bank, he chairs a variety of Grameen branded institutions dedicated to serve the resource poor. He can mobilise millions of dollars from both international development agencies as well as Fortune 500 companies to partner any of these or further ventures he sets up. A person of his energy, reputation and fund raising capacity should, thus, be irrevocably bound to the Grameen Bank with hoops of steel and age should not be seen as a bar to his involvement.

Indeed, in Bangladesh as in many countries, age is no disqualification to discharging responsibility. Bangladesh’s finance minister is 78 years old. Our planning minister is nearly 80 years old. Several of the ministers or ministerial level appointees serving the prime minister as advisors have either crossed or are approaching 70. The prime minister as well as the leader of the opposition have led their respective parties for 3 decades, longer than Yunus’s tenure as Managing Director of Grameen Bank.

All these public figures should have long been retired if the attorney general’s declaration in court, that 60 was a universal retirement age, would have been recognised. Fortunately, all the above figures appear to be in the prime of life, enjoy the confidence of their party and government and appear quite capable of carrying on as long as they are willing to do so. To, therefore, apply some arbitrary age limit to the active engagement of Yunus with an organisation he has created from nothing, is neither fair nor good business.

In point of fact, Yunus himself, has declared that he is no longer interested in managing the day to day affairs of an organisation as large as Grameen Bank. He has repeatedly stated he wants to step down and hand over the position of CEO to a professionally competent person, selected through a fair search procedure, who can command the confidence of the millions of members who own the Bank.

In order not to shake the confidence of the members in the continuity of the organisation and to retain the presence of their most valuable capital asset with the Bank, ideally Prof. Yunus should be invited to assume the Chairmanship of the Board of Grameen Bank. In this capacity his presence will perpetuate the global reach of the Bank and retain its access to the policymakers of Bangladesh and the world as well as to the financial community. This would greatly reassure the Bank’s 8 million members that their most prized asset remains engaged with the organisation which embodies their livelihood and life’s savings. Any reluctance to accept such a logical and constructive solution to this gratuitously destructive confrontation would indicate to the world that other variables, unrelated to the interests of Grameen Bank, are in play.

The person who should initiate this constructive conclusion to this regrettable and damaging episode in our history should be none other than the prime minister, who could hardly be insensitive to the concerns of the millions of women who own Grameen Bank or to the political consequences of their alienation. Nor could she be unaware of the domestic political and diplomatic capital so painfully accumulated by her, which is being squandered over an issue which is quite peripheral to her immediate political agenda.

The time has come for the prime minister to re-evaluate the politically costly advise being fed to her. She has already demonstrated her maturity and statesmanship in her decision to resile from her government’s unwise decision, based again on poor advice, to take over Arial Beel. She should now decide to put this unsavoury as well as destructive episode over Grameen Bank behind her and move on.

This may be done through an invitation to Prof. Yunus to meet with her and the finance minister, where all the misgivings she may have accumulated about Grameen Bank and Prof. Yunus should be discussed in a spirit of constructive engagement. The prime minister should then personally invite Prof. Yunus to assume the Chair of the Board of Grameen Bank and for them to open a new chapter in the relations between the state and Grameen Bank. Under such a dispensation the search for a managing director of international stature should be initiated.

Within such a spirit of reconciliation, the prime minister should perceive Yunus not as her adversary, which he obviously cannot be as she is the democratically elected leader of the country, but as an asset in the building of a din bodol where poverty and injustice can be banished from Bangladesh. The measure of a leader is the ability to transform her perceived adversary into an ally. The measure of a statesman is a leader who can join hands with her adversary in building a better tomorrow for the generations to come.’

For the full article, please click

An ordinary citizen

Possible impacts of removal of Yunus from Grameen Bank March 13, 2011

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Fazle Hussain Abed,founder and chairman of BRAC in a statement on the removal of Dr. Yunus from Grameen Bank said that the haste removal will create in-confidence among the borrowers. Either they will delay the payments or withdraw the money hastily. He asserted that Grameen Bank and like organizations are unique in character and it will be difficult to maintain it by the normal banking system. One thing Fazle Hussain abed didn’t mention is the in-confidence it will create on the social entrepreneurs.

A general notion would be, ‘the government may remove anybody from any organization, public or private, whenever it likes; it can remove the bosses, how popular he is at home and abroad . It may not be true only for Grameen Bank, each and every organization or institution in Bangladesh that is in someway under the control of Government may face the same ordeal. In a country where judiciary is dictated by the government, there is no way out for the victim’.

The attempt to remove already created a stir. USA and other countries have expressed their concern. Finance minister tried to explain the steps taken by the government in a meeting of ambassadors and representatives of international bodies. The impact of the meeting on the ambassadors and others present in the meeting was expressed by Mr. James Moriarty, the ambassador of USA as he said his government is deeply troubled by the move.

The move will create a bad impression about the attitude and intellect of the present leaderships and integrity and independence of institutions of Bangladesh.The hope on the present political and administrative system of Bangladesh will be lost.

The citizens of Bangladesh are closely following the incident. They are judging the prudence of this government and forming a notion about this governance that will be reflected in the next election.

It may be easy to take the control of Grameen Bank but it will not be easy for the government to run it properly. Government has already shown its in-aptitude in running the share market and other financial institutes. Any attempt to run Grameen Bank if ends in failure, then the attempt will be boomerang for the government. As 4 crore people are directly or indirectly connected with Grameen Bank, they represent a huge vote base for any party. Any displeasure of them will be enough to shatter the dream of any political party. Rehman Sobhan, leading think-tank of Bangladesh economic policies urge the government to listen to the 8 million owners of Grameen Bank.

So government should deal with the issue very cautiously.

An ordinary citizen

‘Bangladesh would be able to see its dream come true’- says Nobel Committee Chairman Professor Mjos July 18, 2008

Posted by bdoza in BANGLADESH, Yunus.
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‘Bangladesh would be able to see its dream come true’- says Nobel Committee Chairman Professor Mjos The Chairman of the Norwegian Nobel Committee Professor Ole Danish Mjos is on a visit to Bangladesh on an invitation of Dr. Muhammad yunus. Dr. Yunus first invited him while he was in Norway to receive the Nobel Peace Prize for 2006 at Oslo.

In Bangladesh he attended the inauguration of Nobel Peace Prize Exhibition at Grameen Bank head quarters at Mirpur,Dhaka where he opined that Bangladesh would be able to see the dream come true through building a prosperous Bangladesh free from poverty. The exhibition was organized by The Norwegian Nobel Peace Center, the Norwegian embassy and the host Grameen Bank.[DS]

Professor Mjos also addressed some 3000 students of different institutions and universities gathered at Bangladesh-China Friendship Centre on 17 July 2008. He said, ‘lets together create a world without poverty, let’s build peace and prevent war, focus on integrity, fight global warming and protect environment and let us work for a word free from nuclear weapon’. [DS]

The visit by Nobel Committee Chairman Professor Mjos to Bangladesh is very remarkable and is the recognition of Dr. Muhammad Yunus’ contribution to peace and poverty alleviation the relation of the two is defined by Mjos as ‘the struggle against poverty is the work for peace of the first order’

An ordinary citizen
Post Script:
Mijos visited Damrai, a rural area where the women changed the fate of them and their families through microfinance from Grameen Bank. Mjos was greatly impressed with the effort of these women[DS]

Mijos in an interview to Prothom Alo on 20 July, 2008 , the leading bangla daily, ‘To be mid-income country or to attain the mellenium development goal Bangladesh needs good governance in total perspective and for that competent leadership is needed. Bangladesh has many problems. Climate change due to global warming has added to the problem of poverty. So problem becomes doubles. To overcome this and to progress to success Bangladesh needs educated, competent a trained leadership.’

His comment on Dr. Yunus is also interesting. ‘Professor Yunus is a man of rare qualities. If he stayed back in USA, then he would have been acclaimed as an exceptional scholar throughout the world….’ he said.

Details of the interview[PA]

Venture of Grameen in America- Grameen America May 1, 2008

Posted by bdoza in BANGLADESH, ECONOMY, NGO, People, Yunus.
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Grameen Ammerica –Grameen’s first micro-finance operation in New York opens recently. Dr. Yunus inaugurates the first branch at Jackson Heights formally though the branch started to work since January 2008.

Grameen America will work as an independent microfinance organization and will not depend on Grameen for its operation though the operational methods will be that of Grameen.

The target population of GA is initially the low income groups of New York City that includes Bangladeshis and Hispanics. Both the groups, more the Hispanics already showed their interest in the microfinance operation. So far 200 families have taken loans from the bank.


A visit to Grameen-Danone: the model of social business March 25, 2008

Posted by bdoza in AGRICULTURE, BANGLADESH, ECONOMY, People, Yunus.
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grameen-danone.jpgI felt an impulse to visit the Gramen-Danone plant when I learned from the internet that Grameen Danone is built on the model of social business- a concept knitted by Dr. Muhammad Yunus. ‘Social business is not to achieve personal gain but to pursue specific social goals’ he said in his book ‘Creating a World without Poverty-social business and the future of capitalism’.

I took a break of 2 days from my job and traveled 600 km to see the project by myself.

I took primary information from one of my friends staying at Bogra. Then I contacted the Resident Engineer who was in the charge of the project over telephone and expressed my interest and hinted that I may come any day.