“Yunusgate”

This piece is not about whether Grameen Bank's management practices have been lawful or not, nor is it about idolising Muhammad Yunus as the saviour of the poor. Instead, this piece is simply about the way the Government of Bangladesh is handling the status of Grameen's founder (and his perceived threat for the ruling party).

For any dispassionate observer, the ouster of Yunus from an institution he founded and developed into a global symbol of self-help on the flimsy ground that he is past his legal retirement age is beyond comprehension. This is a scandal of stupendous proportion. This is Yunusgate.

Nobody would dispute the law's autonomous course, but to any conscientious person the Bangladesh Bank's abrupt application of an antiquated law to an iconic Nobel laureate with such flagrant disregard for national and international opinion smacks of personal vendetta and political machination.

This misstep is going to hurt the Awami League for years, both in electoral politics and international relationships. If the online commentaries in the last few days are any indication, the League has already managed to alienate a lot of Bangladeshis, who are politically independent-minded but generally lean toward the party. This is absolutely the wrong fight the Awami League needed right now. Who are the beneficiaries of this blunder? Ghulam Azam and the coterie of war criminals, who should be brought to justice for crimes against humanity.
Neutral observers know that there have been governance and transparency issues within Grameen, for it allegedly grew too invested in the cult of its founder. Researchers have noted Grameen's unwillingness to disclose repayment records and respond to criticisms concerning excessive interest rates and repressive loan recovery policies. In January this year, the New York Times summed up the trouble in the microfinance industry with this opening salvo: "Microcredit is losing its halo in many developing countries."

Given the turmoil, the Government of Bangladesh should have focused on trying to address larger regulatory problems within the microcredit industry and assess its effectiveness to alleviate poverty after four decades of performance. Instead, the Government chose to target

Yunus, hurling at him all kinds of epithets. Who wouldn't be suspicious?
Because the idea of fighting against poverty has a universal appeal—inspiring from heads of states and peasants to queens and small entrepreneurs—Yunus has transcended nationality in ways Mandela has by virtue of his fight against social injustice. Therefore, the whole world is watching, with disgust, how the Yunus saga is unfolding. It is mortifying to think that we have made this monumental pettiness a world spectacle.

What is the need for this surging negative attention of the international media, especially when Bangladesh has in recent years been valourised by the world community for its economic growth, poverty alleviation, and women's empowerment? The Government's defiant and self-destructive indulgence in the political engineering of Yunus' removal seems no less than public relations and foreign policy suicide.

The general tone of the global media in the past couple of days was of bafflement and shock. Canada's Globe and Mail wrote on March 2nd: "Four short years ago, Muhammad Yunus joined the saintly ranks of Mother Teresa, Martin Luther King Jr. and Nelson Mandela as winner of the Nobel Peace Prize. This week, the same Nobel laureate found himself mired in the muck of Bangladeshi politics, a dizzying tumble for a man who US President Barack Obama said in 2009 'was just trying to help a village, but somehow managed to change the world.' In a nasty turn of events, the central bank of Bangladesh said it had fired Dr. Yunus from the very microcredit institution he founded, Grameen Bank."

Mary Ellen Iskenderian, president and chief executive of Women's World Banking, summed up the illogic of the whole drama: "It's really very, very concerning that in a country with the largest penetration of microfinance, where you have seen the poverty line shift upwards because of microfinance…to have that threatened for political purposes makes my heart sick."

The absurdity of Yunus' humiliation has created enough legroom for the international media to speculate wildly. The Economist, for instance, was unsparing in detecting a personal dimension in this tragicomedy: "Mr Yunus had become by far the most famous Bangladeshi in the world, usurping even the prime minister's late father, Sheikh Mujibur Rahman, who led the country to Independence in 1971. According to those who know her personally, this was a bitter pill for Sheikh Hasina to swallow."

If such impressions are percolating out there, wouldn't one be a bit more careful and prudent not to spawn what would be a predictable reaction in the media? Do the government functionaries surrounding the prime minister read at all the media coverage of what is quickly morphing into an international scandal? Do they convey to the prime minister how the political and economic repercussions of this misstep might soon be too much to absorb?

A few possible scenarios in the wake of Yunusgate are these:
First, the Awami League is likely to lose a great many voters in the next election, especially rural women, the predominant beneficiaries of microcredit. According to a study published from Columbia University in 2004, in the 1996 general election for the first time in Bangladesh history more women than men voted, a phenomenon that explains why Jamaat-e-Islami lost 14 of its 17 parliamentary seats after the fundamentalist party mounted opposition to microcredit and women's rights. If micro-lending falters from this moment on, rural women will remember what caused it.

Tired and embarrassed of what is frequently being touted globally, "the muck of Bangladeshi politics," the educated urban middle-class in Bangladesh and abroad is not going to forget the ill treatment of a person they consider, openly or covertly, the most viable alternative to traditional politics mired in bickering and meanness. It is time that the League became a bit introspective. The 1960s' style activist politics needs recalibration with new realities: rapid and easy access to information, Facebook, YouTube, and, most important, the fact that people of all walks of life are now much more empowered to think independently. A singular hegemonic state ideology doesn't cut it anymore. Cadre-based politics simply won't work in the future. The politics of the future will have to rely heavily on consensus-building.

Second, the government's morbid lack of civility in treating Yunus will create a global image crisis for Bangladesh. Powerful figures across the world have already reacted sharply. The size of the world voluntary organisation called Friends of Grameen is growing rapidly, and its chair, Mary Robinson, former President of Ireland and former United Nations High Commissioner for Human Rights, has vowed to mobilise the world opinion in favour of Yunus' work. Among others, Michel Camdessus, former Managing Director of the International Monetary Fund, has recently joined the group. Therefore, the impact of Yunusgate on donors' attitudes toward Bangladesh will be significant, despite Foreign Minister Dipu Moni and Finance Minister Muhith's monosyllabic assertion otherwise.

Third, this is going to be a terrible governance precedent. The Awami League may mobilise its grassroots cadre and state machineries to demonise Yunus, and it may yield short-term gains, but in the long run this misadventure will discredit the democratic institution-building capacities of the nation-state. It will choke the political and intellectual progress the country has made in the last two decades or so.

Finally, the vibrant not-for-profit micro-lending industry (its problems notwithstanding) that has once elevated the stature of Bangladesh in the eyes of the world community will bear the brunt of this eccentricity and self-destructive paranoia. Who wins in such a situation? For-profit micro-lending banks like Compartamos (a Mexican bank that went public in 2007) and SLK (the largest microfinance bank in India to go public last year).

It is going to be a real tragedy to think that someday soon Bangladeshis will recall Professor Yunus' melancholy face to gauge the success and failure of the Awami League government this time around. It is time the League came to its good senses and stood up for its principles.
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Adnan Morshed, PhD, teaches at the Catholic University of America in Washington, DC.