[ALOCHONA] The Yunus case

The Yunus case

Courtesy Daily Star 14/04/11

Mahfuzur Rahman

Bangladesh Bank removes Professor Muhammad Yunus as managing director of Grameen Bank. The aggrieved Nobel laureate goes to the High Court for redress and loses. He goes to a higher court which upholds the decision of Bangladesh Bank.

This is of course far more than another "case" in an increasingly litigious society. Here, underneath the legal briefs, is a saga of an idea taking shape and touching the lives of millions living in poverty. But this is not all a story of self-effacing altruism. This is also a story of hyperboles, egos and, in retrospect, a bit of absent-mindedness and lack of foresight.

Professor Yunus and his Grameen Bank have travelled far from the noble simplicity of the start. It was the year 1979. Professor Yunus had come to the United Nations where I was an economist. He was there as a member of the Bangladesh delegation to the United Nations General Assembly.

Bright and bubbling with ideas and energy, he caught the attention of some of the bureaucrats at the UN. Was he interested in a UN job? Most people would have jumped at the opportunity. Professor Yunus did not. He had other ideas. He had just made a humble beginning with microcredit back home in Chittagong and he wanted little else than to go on with it.

The delegation included a former colleague of mine at the Bangladesh Planning Commission who had introduced me to the bright young man from Bangladesh. I invited both to dinner at my Manhattan apartment. A cold December evening was spent in warm conversation that had little to do with microcredit. Dr. Yunus, all smiles, and steeped in humility, was polite to a fault to his elder host. In a few more days he was to return to Chittagong and his dream of making a difference for the poor with microfinance. I never met him again, but the brief encounter remained etched in my mind.

In the next few years Professor Yunus' idea of providing credit to the poor spread rapidly. Perhaps inevitably, its childhood innocence was lost almost as fast. By itself, of course, innocence achieves little in this complex world. Yet don't we humans keep wistfully looking on it?

In this case innocence started to unravel when the Bank became, in 1983, an official entity, with the Bangladesh government now owning a good part of it, and laying rules of business, not the least of which concern the appointment of its managing director, in this case Professor Yunus.

Government support for the Bank was necessary, but it came at a price. While Grameen Bank was to have autonomy in its functioning as a financial institution, its bureaucracy was to be governed by rules that apply to any other government agency. A Faustian bargain turned a visionary into a functionary of the government, at least in some eyes. Years later the rules governing the tenure of the managing director would come to haunt him.

For his part, Professor Yunus seemed to be blissfully oblivious of the bureaucracy and went on to spread the gospel of microfinance. At the same time, and rather oddly, he felt the need to excoriate textbook economics. He called it an "exclusive playground for blood-thirsty profit seekers." He believed that the "seeds of poverty are planted firmly in the pages of economic text-books." To him it was not far-fetched to suggest that traditional economics treated labour "like draught animals rather than human beings." To him a paradigm shift in thinking was needed if poverty was to be banished to the museum where, according to him, it belonged. And the way to do it was microfinance.

All of this was of course misleading overstatements and hyperboles. We are after all a nation given to overstatements and Professor Yunus' tirade against mainstream economics did not in the end amount to much.

None of it belittles Professor Yunus' achievements. Microfinance has spread rapidly in Bangladesh and around the world. It has made a difference to the lives of millions of poor people, though it is still not clear by how much. It has helped enhance the role of women in rural society. The pioneering achievements have earned Professor Yunus many accolades, topped by the award of the Nobel Prize for peace. The people of Bangladesh rejoiced over the award, Professor Yunus having been the first Bangladeshi and only the third Bengali to receive the prestigious prize.

Then, curiously, he stepped beyond the bounds of microfinance and into politics, quite unaware of its hidden landmines. His intentions were noble, just as they were in his original incarnation: he wanted to clean the country's corrupt political landscape. What he achieved in small loans, he thought, he could attain in big politics.

He even floated a political party for the purpose. He also chose a great name for it: Nagorik Shakti -- "citizen's force" would probably be an adequate translation. The Bengali initials of the words offered up an acronym of Naash, which bore an uncomfortably jinxed meaning of destruction. Nagorik Shakti in did fact self-destruct no sooner than it had been launched, ending its inventor's political ambition. Professor Yunus quietly returned to his turf.

In an otherwise amnesiac nation, his intrusion into politics was not, however, to be wiped from political memory so easily. Politicians, especially some in the highest echelons of politics, we are told, were stung by the Nobel laureate's low opinion of them. Perhaps no less important was the perceived threat to them from someone already larger than life. This after all is a land where, so the story goes, a famous pir put his own son to sleep when the hapless young fellow showed signs of spiritual prowess greater than his father's.

The removal of Dr. Yunus as managing director of the Grameen Bank and the subsequent developments are a curious mélange of the correct and the absurd. In removing him from his position of authority at Grameen, Bangladesh Bank was working within the law defining the age beyond which he could not function in that capacity. But then Dr.Yunus had been over the legal age limit for ten years now. Why was not he removed sooner and why did Dr. Yunus continue in his position? Was this a pure case of supine absent-mindedness all round?

The "case" appeared to split the nation. Those who thought that no good would come out of microfinance reiterated their position, and squarely found fault with Professor Yunus overstaying at the helm of Grameen. Much more vocal were his supporters. A recent gathering of prominent economists in Dhaka seemed to suggest that the government should heed the calls of the millions of shareholders of Grameen (and leave Professor Yunus alone) rather than apply the law blindly (and have him removed).

On the other hand, the law may be, in the famous words of a Dickens character a ass, a idiot, but it is meant to be upheld, and if a "democratic process" clashes with the law, the latter must still be upheld, till the law itself is changed, democratically. Not incidentally, it is Professor Yunus who sought redress in law.

The international reaction to the removal of Professor Yunus was amazing, though, given his prestige abroad, not unexpected. A large number of western nations openly expressed their misgivings about his treatment in his own country. What is truly amazing, however, is the general tone of the message from abroad, entreating the country to value one of its very own as much as the rest of the world values him.

This is a story that leaves you pondering: perhaps, a little less ego, a little more humility and a bit more foresight would have led to a very different outcome. But then we would be talking of traits of Bengali ethos.

The writer is a former United Nations economist and an occasional contributor to The Daily Star

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