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Philanthropy World Rallies Behind Yunus Over Ouster at Grameen

By Tom Watson on March 3, 2011One Comment

The philanthropy and microfinance sector is nearly united in opposing an attempt by the government of Bangladesh to oust Professor Muhammad Yunus as managing director of Grameen Bank, the social enterprise for which he won the Nobel Peace Prize in 2006.

“This is the latest move in a campaign to persecute Prof. Yunus and undermine the independence of Grameen Bank,” said Sam Daley-Harris, Director of the Microcredit Summit Campaign, in an email to supporters. “This is a scandalous way to treat a visionary who is the world’s greatest innovator in the field of poverty eradication.”

Prof. Yunus has launched a legal battle on against his removal from the top post of Grameen, a dismissal seen by many as part of a political vendetta by the Bangladeshi prime minister, Sheikh Hasina. The Bangladesh central bank’s board of directors voted to remove Yunus, claiming that at 70 years old he was is well over the mandatory retirement age of 60, a situation it had ignored for years. But most observers say the ouster stems from out-dated charges of misappropriated funds and political tension between Hasina and her ruling party and Yunus, one of the world’s best-known figures. (The Bangladeshi government owns 25 percent of bank by statute).

The social sector’s reaction to the dismissal was neatly summed up in a tweet by New York Times columnist Nicholas Kristof: “I’ve seen lots of dumb, self-absorbed politicians. But rarely one as venal as Bangladesh PM Hasina as she persecutes Yunus.”

And the U.S. government signaled hits displeasure with the action as well. The State Department said it was “deeply troubled” by the Bangladeshi’s central bank’s efforts to fire Yunus and that Hillary Clinton, Secretary of State, would discuss it with him in Washington next week.

“The U.S. has been a great friend to Muhammad Yunus, and he and Grameen Bank need our support now more than ever,” said Joanne Carter, executive director of RESULTS Education Fund, a charitable fund supporting micro-credit. “We urge President Obama and Secretary Clinton to use every diplomatic tool available to preserve the independence of Grameen Bank and, by extension, the independence of the entire civil-society sector in Bangladesh. If this decision is allowed to stand, it sets a dangerous precedent for other governments to take similar actions against independent microfinance institutions.”

Even occasional detractors of Prof. Yunus spoke out on his behalf. Philanthrocapitalism co-authors Matthew Bishop and Michael Green, somewhat critical of Yunus’s own strong criticism of for-private microfinance, stepped behind the Grameen founder in a post entitled “Leave Yunus Alone.”

As Grameen points out, it is owned by its 8 million or so borrowers, most of them relatively poor women. It remains to be seen if the voice of these owners will be heard. There is a real danger that what is in effect an attempted takeover by the Bangladesh government will do serious damage to Grameen and the people it helps. While there are certainly examples of for-profit microlenders harming the poor, we think the greater harm to the poor is often done by the politicians who purport to be on their side. We fear this will be anther example of that shameful truth – and can only hope that, even at this late hour, common sense will prevail, and that the government of Bangladesh will leave Grameen and its founder alone to get on with the work they have hitherto been doing so well.

Prof. Yunus himself (and by way of disclosure, I’ve enjoyed speaking with him several times) acknowledged that there would be a transition in the future for Grameen leadership – and indeed, his own involvement in the social business movement has often take him well beyond the Grameen structure. “If there is any lack of confidence over Grameen Bank and if people have lack of trust over the institution, then the Grameen Bank will be a shaky institution,” Prof Yunus said after a court hearing. “It is no matter whether I remain in the institution or not. I am trying to secure the future of the institution.”

A group of charities led by former Irish President Mary Robinson – Friends of Grameen – had already been set up to defend Prof. Yunus earlier this year after Prime Minsiter Hasina accused Grameen of “sucking blood from the poor.” Much of the dispute stems from a Norwegian television documentary re-floated charges of irregularities related to donations dating to the 1990s; the bank denied the charges and the Norwegian government approved its response. Still, the Bangladesh government’s move surprised some. Said the Economist:

Perhaps, the most surprising thing in this whole saga is how much of its international reputation the government is willing to risk in order to remove Muhammad Yunus from Grameen Bank. It is difficult to see what there is to gain from Mr Yunus’s removal, apart from the satisfaction in satisfying a grudge—unless, is it possible?—the government intends to take control of the bank, and use it for its political purposes.

Whatever the motive, Sheikh Hasina’s government has chosen to join the ignominious little club of governments who turn against their own Nobel peace-prize-winning citizens.

Meanwhile, the Financial Times quoted a “prominent” businessman in Bangladesh: “He will go to court. In this tug of war, the country will also pay a high price. The world will see Bangladesh as a place that doesn’t respect its own heroes.”

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