The indispensability of Finance Minister Muhith

Reckless in his utterances, Finance Minister Abul Mal Abdul Muhith has of late become over sure about his “indispensability” in the present government. And for him, public opinion or disaffection of the leaders of opinion has always been dispensable. According to a news-analyst in a vernacular daily, the finance minister has been ruling the roast over four big financial scandals during his current tenure over three years eight months. The first one was the share market scam of 2010, which exceeded in its severity the 1996 scam under the first Sheikh Hasina government. He laughed over the plight of small investors who found their capital and savings wiped out in share-market manipulation by share-sharks. The latter were, however, protected by the Finance Minister from ‘political’ considerations, and no action was taken over the Ibrahim Khalid inquiry report that identified the big shots behind the market debacle, and the break-down condition of the capital market has continued ever since.

 

Then came in 2011 the Padma Bridge corruption scandal, and in consequence, the cancellation of the World Bank Loan agreement for the project. The finance minister’s crude reaction was to throw the ball back to the court of the World Bank, accusing the international financial institution of being involved in corruption itself and behaving undiplomatically. Later he toned down his loud-mouthed denunciation of the World Bank, but continued sermonising it by public harangues from time to time. With mainly Indian diplomatic help, he has obtained a breathing space for renegotiating the loan agreement with the World Bank. Other financing institutions who joined the World Bank in a consortium to fund Padma Bridge, such as the Asian Development Bank and the Japan International Cooperation Agency have extended their loan agreements for this month and for three weeks of September respectively to allow time for the finance minister to come to terms with World Bank, which is the leader of the Consortium. The finance minister has indeed managed to strike a world record by provoking the occurrence of cancellation of such a big-size project loan agreement as the Padma Bridge.

 

Another scandal was his speech in the parliament during his presentation of the current budget and in his remarks to the press thereafter. He virtually acknowledged the black-money holders and illicit earners as the movers and shakers of the national economy and sought to lure them to support him bridge the deficit budget and his high-spending leaky pre-election projects. Racketeering got recognition and rewards. Productive trade, industry and agriculture were not only discouraged by the discrimination and injustice meted to honest tax-payers, but also starved of regular bank-financing on account of liquidity crisis as a result of heavy government borrowing. 

 

It has now been revealed that the culture of wheeling and dealing and illicit practices have so contaminated the banking system, and the “politically appointed” directors of nationalised banks have been mixed up with rent-seeking and money-spinning rackets in such a way that despite bank liquidity crisis, directors and officers of some state-owned banks have been able to funnel out over Taka four thousand crores into private pockets and share the loot. The scandal has badly shaken customer-confidence in the banking system as a whole. But the Finance Minister is simply laughing away the matter. He has blamed the media for “over blowing” the gravity of the scandal and creating difficulties for proper action to be taken, which he said was the recovery of the loot rather than punishing the culprits. He said he was confident of recovering half the amount embezzled, and claimed that probably nearly the entire amount could have been recovered had the media not raised a hue and cry to scare away the wrong-doers. He also bluntly suggested that a sort of systems loss of Taka 4000 crore in bad debt out of Taka 40,000 crores lent by the banks annually (i.e. 10%) was not such a big deal, so to say.

 

The public, the banking leaders, the business leaders and even the colleagues of the finance minister in the parliament were flabbergasted by such an irresponsible attitude towards “financial crime” adopted by Finance Minister Muhith, who has meanwhile rewarded one of the suspects of collusion in that crime, the Chairman of the Board of Directors of Sonali Bank, by renewing his tenure in that post for an indefinite period. There was speculation that the suspect Chairman and his board members would be eased out of office, if not taken to task, by not renewing their contract when their tenure ended after the first week of September. That expectation has been dashed now. But public demand is becoming louder by the day for punitive action to be taken against all the culprits, including ministers and advisers of the government lending “political” blessings to the wrong-doers, irrespective of high connections or pleas of diminished responsibility. Two important Members of Parliament, Tofail Ahmed and Sheikh Fazlul Karim Selim have already voiced in the floor of the House their strong disapproval of the finance minister’s utterances and inaction. They have urged the finance minister, albeit with mild words but with strong meaning, to institute criminal proceeding, against all wrong-doers without sparing “political” protégés, and also advised the finance minister to talk less. But who cares?

 

The question, however, looms whether in reality Finance Minister Muhith is indispensable for the present government. Indeed in the reactions from the government’s own set of aspirants for promotion in the financial hierarchy, one can sense bids for outdoing one another in pinpointing blame on Muhith and shifting part of responsibility for the banking scandal from one to the other. In the race to the chair of the Finance Minister in case it falls vacant are Adviser Masihur Rahman and Bangladesh Bank Governor Atiur Rahman. Both have been put on the dock for their “share” or their “failure” in the course of the scandal by other aspirants like Khondaker Ibrahim Khaled (Krishi Bank Chairman) and Farashuddin Ahmed (former Bangladesh Bank Governor). Finance Minister Muhith’s fate may be decided in the course of the month by his success or failure in obtaining assurances from the World Bank for renegotiation of the Padma Bridge loan agreement. For all the diplomatic words of assurance and support he has obtained, one wonders what trump card he may have up his sleeves to be so cocksure in his demeanour.

 

BY :  Sadeq Khan.

George Shultz, Madeleine Albright Join Growing Groundswell of Concern over Possible Government Takeover of Grameen Bank

Former Secretaries of State George Shultz and Madeleine Albright have joined a growing chorus of global leaders, including Secretary of State Hillary Clinton, that have decried the Bangladeshi government’s latest maneuvers to take over the Grameen Bank. The bank has been a pioneering model emulated worldwide, demonstrating the power of microfinance to help lift individuals out of extreme poverty. 

Historically Grameen Bank has been 97 percent owned by its customers, women from Bangladesh’s poorest regions. In late 2010, the government installed a chairman and gave him the authority to name a new managing director, a charge previously held by the bank’s board, the majority of whom are borrowers. This shift has created concern worldwide that shareholders will lose ownership of the Bank. There are also increased reports of government corruption, including the raiding of government run banks by government officials and bribe demands that led to the cancellation of the World Bank loan for the Padma Dam. 

In the Wall St. Journal, Shultz and Albright wrote, “Grameen Bank is more than just another financial institution. It is a symbol of how people who lack advantages of any kind can nevertheless lift themselves out of poverty through hard work and personal accountability. We hope the government will think again and choose instead to preserve a system that has worked well, earned credit for Bangladesh on the world stage, and inspired followers across the globe.” 

There is growing momentum to support the borrowers of the Grameen Bank in ensuring the institution retains its independence:

• Secretary of State Hillary Clinton and the U.S. State Department have expressed concern regarding the bank takeover.
• U.S. Senator Barbara Boxer led all 17 female U.S. Senate members in urging the Bangladeshi government to preserve the autonomy of the Grameen Bank.
• Journalist David Bornstein, who specializes in writing about social innovation, and entrepreneur Richard Branson have publicly voiced support for the Grameen Bank shareholders in the New York Times and The Times, respectively.
• More than 140 prominent female Bangladeshi leaders have expressed their solidarity with the women of Grameen Bank. 

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Dipu wages propaganda war against Yunus

While one of the most talkative ministers of the current government, who suddenly got tamed since her grand flop in signing the Water Sharing Treaty with India, foreign minister Dr. Dipu Moni despites series of her failures, which already is bringing unimaginable political and economic catastrophe for Bangladesh, her ministry has engaged into nasty diplomacy centering the issue of Grammen Bank founder and Nobel Peace Prize laureate, Professor Muhammad Yunus.

Although the issue of this internationally acclaimed personality centering his removal from the post of managing director of Grameen Bank is already under international radar, Dr. Dipu has instructed her fellow officials at the Ministry of Foreign Affairs for waging propaganda war against Yunus, ignoring the fact of his huge influence in the international arena. Working on the tip of the foreign minister, the officials at the ministry has already incorporated several materials right on the website of the foreign ministry titled 'Facts Relating to Professor Yunus & Grameen Bank'. As preface of the documents put on display at the website of the foreign ministry, it writes, "The Grameen Bank and Professor Muhammad Yunus have featured in the international and national media quite extensively over the past one year. The reports mostly portrayed a "conflict" between the Bangladesh Government and the Managing Director of Grameen Bank at the time, namely, Professor Muhammad Yunus. The Government feels it necessary to clear the air, especially in view of the misperception that these reports may have generated.

1.Initially, the publicity relating to Grameen Bank and Professor Yunus arose following the release of a documentary Film produced by a Danish journalist in the Norwegian media. The film highlighted the nature of Grameen Bank's activities, its modus operandi, the many complaints by its borrowers and falsehood of the myth that Grameen Bank's borrowers had succeeded in breaking the poverty barrier. No less significant was the unauthorised diversion and misuse of Norwegian donor funds intended for Grameen's borrowers in the rural areas, Professor Yunus's expressed desire to evade tax through such unauthorised diversion, and a series of other breaches of the law.

2.When the Government's attention was drawn to the wide publicity given to the documentary film, the Government of Bangladesh instituted, on 7 January, 2011, a high powered multi-disciplinary Review Committee to examine and investigate the activities of Grameen Bank.

3.Further, when the Government's attention was also drawn to the fact the Professor Muhammad Yunus's continuance in the office of Managing Director of Grameen Bank after 28 June, 2000, that is upon reaching the superannuation age of 60 years, was contrary to the governing law, namely the Grameen Bank Ordinance, 1983, the Service Rules made thereunder, the Constitution of Bangladesh and several statutes which defined the position of the Managing Director of Grameen Bank, a statutory public authority, as that of "public servant" or "public employee", Bangladesh Bank ( the Central Bank) informed Grameen Bank, and its Chairman, that Professor Muhammad Yunus had passed the age of superannuation and had ceased to function as Managing Director of Grameen Bank by operation of law.

4.Professor Yunus challenged the letter issued by Bangladesh Bank to the Chairman, Grameen Bank by moving a Writ Petition in the High Court Division of the Supreme Court and thereafter in multiple appeals before the apex Court. The Appellate Division upheld the decision of the High Court Division which rejected his Writ Petition, and Professor Yunus was deemed to have retired from the office of Managing Director of Grameen Bank on 28 June, 2000 upon reaching 60 years of age.

5.The high powered multi-disciplinary Review Committee submitted its report on 24 April, 2011."

The above five point clarification from the Ministry of Foreign Affairs has been also followed by some links to few more statements and documents, which certainly are put together with the mission of dampening the ever-increasing global image of the Nobel Peace Prize laureate.

Professor Muhammad Yunus turned a villain in the eyes of the top policymakers of the ruling Bangladesh Awami League led leftist-Islamist coalition government, when he harshly criticized limitless corruption of the politicians as well took an initiative of floating a political party named Nagorik Shakti [Citizen's Power], although his political ambition got flopped at the zero hour as he failed to get expected support either from the mass people or from the members of the civil society as well as politicians.

Simple reason behind such shameful consequence of his political ambition is, because though he attained grand success to build an international image being the founding father of Grameen Bank, the people at large in the country never anticipated him stepping into politics, nor they had any intention of extending any support to the initiatives of Nagorik Shakti in emerging as a political party, which surely would be an alternative to the existing mainstream political forces in Bangladesh. On the other hand, the timing of floating this party was wrong for Professor Yunus, as by that time, Bangladeshis at large were already fed up with the massive misrule, state level corruption and extortion as well as gross violation of human rights by the army backed interim government, which was headed by Dr. Fakhruddin Ahmed, who had earlier served as the governor of Bangladesh Bank. At that point, people were seeing the flopped banker Fakhruddin in Professor Yunus, which stopped them from extending any support to his political ambition.

Professor Mohammad Yunus became highly ambitious of becoming the leader of Bangladesh seeing over-whelming excitement and celebration of the people of the country when he got the Nobel Peace Prize. At that time, right from the moment of declaration of his name as the recipient of this most prestigious prize, millions of Taka was spent by Grameen Phone as well as other enterprises of Grameen Bank in a massive public relations and propaganda hawk in favor of Yunus, which was later understood to have been initiated at the personal desire of the Nobel Prize laureate, as he already was seeing himself as the prospective leader of the country.

What Professor Yunus missed is, he did not remember, how the people of Bangladesh exploded into joys and celebration when country's cricket team got qualified to play international test matches. Seeing such huge excitement of the people, should any of the cricket players or even the captain of the team committed the same blunder of becoming a national leader, his or their consequences would be same as what has happened to Professor Yunus.

In my personal opinion, Professor Yunus could not absorb the shock [in positive sense] of getting the Nobel Peace Prize and from that moment, unfortunately he lost balance totally and had been behaving sometime as a mere kid while mostly as a senseless individual. Instead of expressing gratitude to the people of Bangladesh for their support and encouragements, Dr. Yunus rather tried to educate the people as well as the leaders, while he also made frantic bids of using local and international media in setting him almost at the same status of the great leaders of this country. No doubt such blunders were initiated, nurtured and finally put onto Yunus' head by none but his own younger brother Muhammad Jahangir, who had visibly been the second-in-command or next man to Mohammad Yunus into all affairs centering the then Grameen Bank boss. No doubt, Yunus got a good lesson from the people that his aspiration of riding into apex level of country's political power or floating a political party were not endorsed by the Bangladeshis at large.

For a person of his height, no doubt this very signal from the people was more than enough for Professor Yunus to swallow his political aspiration for good. But, leaders of Bangladesh Awami League could not anyway tolerate Mohammad Yunus anymore, as they started seeing a real ghost in him for no valid reason, and at the tips of some duffers, the pundits of Bangladesh Awami League started searching ways of down sizing Yunus both nationally and internationally. From that moment, an elected government turned into an open enemy of Professor Mohammad Yunus and initiated all out conspiracies in removing him from the post of Grameen Bank initially and finally pushing him inside prison with various charges. The first part of the agenda of the rulers had already been implemented and now the power elites are spending sleepless nights in seeing Yunus facing trials, ignoring the fact that such rudeness would surely put the entire nation into a huge crisis both political and economic.

BY : Salah Uddin Shoaib Choudhury.

Microfinance pioneer Grameen Bank weakened by government meddling

Prime Minister Sheikh Hasina of Bangladesh seems bent on destroying the best elements of the Grameen Bank, whose loans to poor women inspired a global movement now enabling more than 135 million borrowers to become self-employed. More than a year ago, she engineered the spectacularly illogical dismissal of Muhammad Yunus, Nobel Prize-winning founder and managing director of Grameen Bank. 

Hasina rode roughshod over the bank’s own board’s decisions and bylaws in imposing a mandatory retirement on Professor Yunus, ostensibly because of his age. (She seems not to have been troubled by issuing that dictate through her minister of finance who, himself, was many years older than Yunus.)

But not content to have removed Yunus, whose worldwide fame seems both Bangladesh’s most notable asset and Prime Minister Hasina’s most aggravating cause of envy, she has now moved to gut the Grameen Bank’s fundamental premise of governance: that the women who comprise the bank’s clientele should have a controlling voice in its policies and programs. In a region not notable for women’s rights, this leadership position by the Grameen Bank has been salutary for the bank, a model for other institutions and an inspiration to all those seeking to advance the well-being of women and their families.

What exactly is Prime Minister Hasina’s latest plan? Very simple: Trash the Grameen Bank’s historically successful model of a borrower-dominated board that has the power to elect the managing director of this bank, in which the borrowers are the leading shareholders. And replace that process with what? Let’s see. 

What could be the most disempowering, backward, ham-handed, intrusive alternative one could imagine? 

Eureka! Have the government-appointed chair of the board summarily appoint the managing director! Forget about the decades-long organic evolution of women’s leadership in both governance and management at Grameen Bank. Just empower Hasina’s crony chair to install a managing director, who will reliably turn the bank into a compliant arm of the Hasina administration — an administration whose appreciation of this international treasure, if such appreciation exists, is no barrier to envy-driven decisions that simultaneously compromise both the bank’s all-important independence and the administration’s own already shabby reputation. 

It would be easy, and wrong, to dismiss this as a tempest in a teapot. Beyond its role in pioneering microfinance and poverty-reduction programs that have now been adopted worldwide, Grameen Bank is a shining global model of what it means to empower women — even, and especially, poor rural women. These women not only comprise 97 percent of the bank’s borrowers, but they actually own more than 95 percent of the equity in the bank. Accordingly and appropriately, women hold nine of the 12 seats on the board. And it is little noted but no small thing that the Nobel Peace Prize accepted by Muhammad Yunus was actually awarded to him and to those women — that is, to the bank itself, which they have built and, until Prime Minister Hasina butted in, have successfully controlled.

At this moment, a hand-picked Bangladeshi government commission is “studying” Grameen Bank to find ways to “improve and protect” it. Rodgers and Hammerstein captured this situation perfectly in “The King and I,” when the king, reflecting on foreign “allies” increasing their role in Siam, sings, “Might they not protect me out of all I own?” 

What can be done? Secretary of State Hillary Clinton visited Dhaka in May to urge Prime Minister Sheikh Hasina and Foreign Minister Dipu Moni to take no action that would undermine Grameen Bank. In addition, the 17 women who currently serve in the U.S. Senate have sent a strongly worded letter to Prime Minister Hasina. 

And this communiqué was issued by our State Department earlier this month:

“We call on the Government of Bangladesh to respect the integrity, effectiveness, and independence of Grameen Bank. We urge the Bangladeshi Government to ensure transparency in the selection of a new managing director who has unquestioned integrity, competence, and dedication to preserving Grameen Bank, its unique governance structure, and its effectiveness in bringing development and hope to 8.3 million of Bangladesh’s most vulnerable citizens, mostly women.”

It has seemingly always been the case that enlightened advances forged over decades by millions of dedicated people working together can be trashed with astounding finality by one misguided ‘leader.’ We owe it to those who created Grameen Bank, and to history, to show that such travesties are not inevitable. Citizens wishing to add their voices to this urgent call for preservation of a global treasure can sign on to a petition by searching ‘change.org Grameen Bank.’” 

This is not a futile exercise. The worldwide firestorm over the ousting of Muhammad Yunus still reverberates in Hasina-administration deliberations. A fresh onslaught of petitions on this new issue may give them some pause. And perhaps even more important, our loud protests can mobilize the voters of Bangladesh, who, ultimately, must decide if their democratically elected prime minister should be allowed to demolish their country’s most celebrated contribution to its own people and the global community.

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The Assam clashes are about land and livelihood, not religion

Bertil Lintner

AS BERTIL LINTNER mentions in the introduction of Great Game East, the expression “Great Game” was originally used to denote the struggle between two western powers to wrest control of energy-rich Central Asia. Across the Himalayas, in the east, another great game has been on for some time now between the two Asian giants — India and China. The fight began over Tibet and now includes Northeast India, Myanmar, Bangladesh and the Indian Ocean. Lintner has even devoted one chapter to Indo-Bangladesh relations in his book. Here, he talks to Kunal Majumder about the ongoing violence in Assam and how the United Liberation Front of Asom (ULFA), once a nationalist movement, ended up becoming a pawn in the great game.

EXCERPTS FROM AN INTERVIEW

Your book has an entire chapter on the relationship between Assam and Bangladesh. What is your reading of the ongoing situation in Assam?

TEHELKA described it quite well. It’s not religious. It’s not Muslims versus Hindus. It’s a struggle for land. There is a lot of pressure on land both because of increase in internal population and massive migration from Bangladesh. Naturally, people from Bangladesh are Muslims and that adds that dimension to it.

But certain interests in India are calling it a grand design to Islamise Assam. Do you find any credibility in such assumptions?

It is possible. But I’m not sure if it is the main reason people are moving from Bangladesh into India. Certainly, Islamic groups will want to take advantage of the situation. Migration to India, first from East Pakistan, and then Bangladesh has always been there. One reason this happens in Assam is votebank politics. If you look back at the Assam Agitation, it was a movement against the so-called foreigners moving into Assam. Not only Bangladeshis, Nepalis too were being evicted. It is not about religion, it is about land and livelihood.

Isn’t it ironical that the ULFA based its politics on an anti-Bangladeshi immigrant stance but eventually accepted Dhaka’s help to fight India?

The ultimate irony is that the movement began as an anti-foreigner movement — less Nepal, more Bangladesh — and they have been exiled in Bangladesh. Assamese militants I met in Bangladesh were not happy to be there but they thought they had no choice. They were being used by Bangladesh intelligence services to create trouble in India. The Directorate General of Forces Intelligence (DGFI) and the Bangladesh Nationalist Party (BNP), more than the Awami League, were behind this policy. Things shifted in Bangladesh depending on who was in power. If the Awami League was in power, the ULFA was sent to Thailand. When Sheikh Hasina came to power for the first time in the 1990s, the entire leadership arrived in Bangkok save Paresh Barua, who was too useful for the Bangladeshi security establishment. He was close to Pakistan’s ISI as well.

The ULFA has now split. Almost everyone in the top leadership is negotiating with the Government of India. Where does Paresh Barua’s future lie?

I first met Barua in 1985 in a Naga camp in northwestern Burma. The Burmese army attacked the camp. He was an excellent fighter, much better than any other Naga. Unlike Arabinda Rajkhowa, who was more intellectually motivated, Barua was the most militant of all ULFA leaders and more politically motivated. The second time I met Barua was in Bangkok. He had come from Singapore, where he revealed that the ISI were encouraging the ULFA to increase their activities in Assam because troops were being withdrawn from the Northeast for Kashmir. It was in Pakistan’s interest to reignite some kind of unrest in the region so that India could move its troops back from Kashmir. This was quite telling. I was quite surprised he was ready to tell me that. I met him for the third time in a safe house in Dhaka, escorted by two Bangladeshi intelligence officers, who were not particularly happy to see me around. Whether you sympathise with them or not but from being a nationalist movement, the ULFA became a pawn in the hands of the establishment of all countries.

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