Saturday, August 24, 2013

Political attacks on Muhammad Yunus and the Grameen Bank

My admiration and respect for Muhammad Yunus is a bit tempered by his views on price controls on interest rates, but he deserves far better than this (WSJ):

Mr. Yunus's political effort fizzled, but Ms. Hasina's suspicions endured. When a documentary accused the Grameen chief of misappropriating $100 million from the Norwegian government in 2010, Ms. Hasina blasted him as a tax evader and "blood-sucker of the poor." Norway's government responded that "there is no indication" that "Grameen Bank has engaged in corrupt practices or embezzled funds."

But in Bangladesh the fix was in. Dhaka officials forced Mr. Yunus from his post as Grameen's managing director in 2011 on grounds that he had passed the mandatory retirement age of 60—though he had passed that age 10 years earlier and Grameen's board of directors wanted him to stay. Bangladeshi officials then started chipping away at the power of the directors, the majority of whom are elected by the bank's 8.4 million borrowers (almost all women) who are also its shareholders.

Now the campaign against Grameen may escalate into nationalization, with Dhaka raising its ownership stake to 51% from 25%. That is one of three options recently recommended to Prime Minister Hasina by a government-appointed commission, along with breaking the bank into 19 separate regional entities.

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