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Nobel peace prize: Well deserved, but…
Overnight Muhammad Yunus joined the global luminaries' rank with the Nobel peace prize for his work in micro-lending. Prof Taj Hashmi, who has worked closely with him, hails the award, but takes a hard look at the reasons behind the choice.
I HAVE MIXED feelings about Dr Muhammad Yunus getting this most prestigious award, the Nobel peace prize. On the one hand, I am happy for him, but on the other, I am worried if Dr Yunus’ immense popularity — only rivaled by Sheikh Mujib’s in 1971 — would be fully taken advantage of by Bangladesh. At least more than a billion people globally read, watched and heard this image-boosting news. And, I know the average people do not know or care to know how a particular physicist, chemist, medical-researcher, physician, economist, writer or a peacemaker got the prize. How many Indians can precisely tell as to why Amartya Sen got the prize? It is a billion-dollar question. On this token, Dr Yunus’ prize matters most to people in Bangladesh and abroad, not what fetched this prize.
I have no problem with that. I also personally feel — as I personally know Dr Yunus — that he is out and out an honest man. He is not the type who would make money by his projects. My only problem is my skepticism about micro-credit as the panacea to all evils related to poverty and backwardness.
I was a big admirer of Grameen Bank up to 1996. After undertaking my book project to work on women and Islam in Bangladesh in early 1996, I spent a few months in Bangladeshi villages doing field work, examining the impact of NGOs on the poor villagers, especially women. I also looked into the problem of the ongoing confrontation between NGOs and village mullahs. I interviewed a cross section of the population, reviewed literature, both pro- and anti-Grameen — there are tons of anti-Grameen literature, both in print and web. And, by early 1997, I was skeptic about micro-credit’s efficacy in eradicating poverty among the poorest of the poor.
Later in 2001 and early 2002, I spent two months in villages in Comilla, Sylhet and Dhaka districts, with my students as their supervisor (anthropology and ethnography). My students, without my prompting, told me that they found non-Grameen villagers were much better off than those who had taken Grameen loans. Some villagers proudly asserted: “Sir, we did not allow the Grameen to open its branch in our village. And, as a result, we are much better off than some neighbouring villagers, (who are indebted to Grameen) by the grace of Allah.”
Most unfortunately, contrary to what Dr Yunus has been telling us, the poorest of the poor simply do not or cannot get Grameen loan, as they simply cannot service any loan at any interest payable in 52 instalments in one year. There is no remission, exemptions or leniency. Defaulters part with tin sheds, utensils, goat and cattle. This came out in so many newspapers in Bangladesh and researchers (even admirers of Grameen) found out on the field.
My only objection to Grameen is its over-reliance on Western donors, who give money for micro-credit, some rural development but never on building roads and highways, railways and power generation. If and when Western donors give money on such projects, the bulk is eaten by their “experts” and spent on buying their equipment and stolen by our ministers and bureaucrats.
I have another problem with Dr Yunus. He has been telling us the story of his bank. How he lent a small amount to one poor Sufia at Jobra village in Chittagong, which she duly returned after she sold the baskets, etc. But that loan he gave to Sufia was interest-free and he did not ask her to repay the loan in 52 instalments, but when she would have the capacity to repay. Is the Grameen doing the same? No, Grameen does not afford to pay credit to the absolute poor (3 crore — Daily Star; Oct 17) and 6 crore (if we take the people below the poverty line, earning less than a dollar a day in Bangladesh). Dr Yunus admits that nothing can be done to the poorest of the poor, who starve days together. Even if you give them totally interest-free loan, they cannot service the loan if you ask them to pay in instalments, from week one. The cow a poor villager buys will take about a year to give milk (you can’t buy a milch cow in Bangladeshi cattle market, unless it is a distress sale during floods or drought). So, the poorest like Sufia will have to wait for a year to make any money from the cow to repay the loan. So, who gets the loan? The category above the absolute poor, with some land, some earning members — sons, husbands.
I am aware of the fact how traditional moneylenders (mahajans) fleeced the poor in Bengal. They charged 96 per cent to 200 per cent and even more as interest. Even now, many Grameen borrowers are engaged in money lending business, often men controlling the women borrower. I don’t blame Grameen for that as it can’t fight patriarchy and mullahcracy in the village.
Poet Rabindra Nath Tagore started a beautiful rural banking system in the 1905 at a village called Patishar in Naogaon district. Tagore’s bank, called Patishar Bank, was very similar to Dr Yunus’s Grameen Bank. But the beauty of Tagore’s bank was that it charged no interest from the borrowers. I, however, do not mean that such interest-free banking is ever viable on a larger-scale for long.
I do believe that Dr Yunus has a vision and that Bangladesh should celebrate this award. But I have some problems in reconciling with the idea that Bangladesh should allow a free hand to donor agencies and overseas investors to get extra privileges at the cost of the nation. If duty-free or tax-free investments benefit the nation, there is no problem. However, we cannot be that naïve in agreeing to import goods to the detriment of our agriculture, health or ecological balance in the long run. We must not allow multi-nationals like Monsanto to market genetically modified seeds in Bangladesh. Donors seldom bring prosperity to the receiving country. One may look at the Narmada Dam project in India sponsored by the World Bank to the detriment and destitution of more than a million peasants in Gujarat.
It is not fair to charge around 28 per cent interest from the “target group” or the poor borrowers (the poorest don’t get the loan, at all), while the Grameen Bank gets that capital from Western donors at a very low interest. Due to high cost of servicing micro-credit the Grameen Bank has to charge high interest. This is the hard reality. So, there is no substitute to good accountable government for development. One may cite Lee Kuan Yew, the father of modern Singapore, who has written and asserted publicly that had Singapore listened to the IMF and World Bank, by the 1990s country would at best have been at the stage of Sri Lanka in terms of development. Similarly Bangladesh, taking Lee Kuan Yew and Jawaharlal Nehru, the great visionaries of our times as inspirers, should come out of the dictates of donor agencies, including the IMF and World Bank.
My reservations about Grameen Bank have only one objective: Bangladesh should not let loose the demon of micro-credit at the cost of its long-term interest. I am neither enamored by the mega NGOs. You would be surprised to learn that how exploitative the mega NGOs like BRAC could be for the average Bangladeshis. How many of you know that a Nakshi Kathar Sari you buy at Taka 12,000-plus at Aarong shops, run by the BRAC, is a by-product of slave labour? It pays around Taka 500 to the village woman who makes the embroidery on the Nakshi Katha Sari. And, it takes her about a month to complete one sari.
The Grameen Bank in the last quarter century lent money to 6.5 million Bangladeshis, mostly women, belonging to the middle peasant or moderate poor categories of people. The poorest of the poor do not get the loan as they simply cannot service the loan. But we all the time hear that story from Dr Yunus about Sufia Khatun of Jobra village in Chittagong, who returned his small loan on time. Sufia Khatuns are not Grameen clients any more, although this myth is very overpowering.  Now, the Grameen has served 6.5 million in 25 years. How many of them crossed the poverty line upward, we do not know. And, how many decades will it take to cover the rest of the poor is a tricky question. Around 40 per cent of the population live below the poverty line — 3 crore among them in absolute poverty.
A Bengali daily, Prothom Alo, (October 19, 2006) published an interview with Dr Yunus, who was generous enough to tell that the Nobel peace prize was meant for the people of Bangladesh. Fair enough. One is comforted by his modesty and love for his people. The same paper published news on the front page about poor villagers starving for two to three days at a time in parts of northern Bangladesh as they have no jobs or money to sustain themselves. One wonders, if micro-credit could help them out. Unfortunately, the answer is “no”. The poorest, around 40 per cent of the population, cannot get micro-credit as they cannot repay their loans in 52 instalments, as they do not have enough assets to support themselves and service the loans at the same time.
However, there is good news that Dr Yunus might join politics and float a political party. I am all in favour of this move. If he resigns from Grameen and become the leader of a political party, and picks up honest and able people from various groups (not from Jamaat and Ershad’s Party), I see there is a hope for the poorest. Microcredit alone cannot eradicate poverty at every level. Since poverty is a political problem, its solution is also a political one. If he comes to power, builds mega power generation plants, spreads mass education, healthcare and looks after good governance, in another 10-15 years, there could be altogether a different Bangladesh, developed and self-reliant. Nothing short of large-scale industrialization can make the country prosperous. If Japan and South Korea, having worse land-man ratio than that of Bangladesh, could perform the “miracles”, Bangladesh has no reason to lag behind for an indefinite period.
Since there are no clear-cut rules about the eligibility for the Nobel peace prize, and since so many non-deserving people got it in the past, we should be happy for Dr Yunus for getting this most coveted prize. Bangladesh should take full advantage of this prominence that this prize fetched to the nation. Mere celebrations will not do any good in the long run. Dr Yunus’s active participation in politics could go to the advantage of Bangladesh as he could draw support from lots of honest and capable people, who in the long run would build a prosperous nation free from external and internal pressure.
For achieving this goal, Bangladesh must distance herself from the donor-driven projects and the NGO culture. The people must understand that neither “politics” nor “government” is a dirty word, provided they remain clean and accountable from global hegemons and their local agents. Nothing will make me happier than seeing Dr Yunus surrounded by people with nationalist fervour and zeal believing in good governance as the only step towards development. With his immense popularity he must not fail in realizing the goal – sustainable development through good governance, not through donor-driven projects or dependence on foreign aid.
Meanwhile, the government should ensure Dr Yunus full protection from Harkatul Jihad types of fanatics and others who might pose a threat to his life.
Taj Hashmi, PhD, Fellow, Royal Asiatic Society, is professor, security studies at the Asia-Pacific Center for Security Studies, Honolulu, Hawaii. His publications include Pakistan as a Peasant Utopia (Westview Press, Boulder 1992) and Women and Islam in Bangladesh (Palgrave-Macmillan, New York 2000) and Islam, Muslims and the Modern State (co-ed), Palgrave-Macmillan, 1994.

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Nobel Laureate Dr. Yunus : Let charity begin at home
Nobel Laureate Dr. Yunus : Let charity begin at home In a recent interview with a young group of representatives of the Hong Kong Bridge Society, Professor Yunus identified the weak political system as the root cause of corruption and held the political parties responsible for nourishing the same. In his typical style, especially after wearing the current crown of the debated Nobel Peace Prize, he prescribed yet again a poor and wilfully “distracting from the root cause” solution, by asking the children to revolt against their parents by showing strong hatred to them in such cases. Although I do not endorse his ideas or solutions, I would expect him to let charity begin at home in testing his own prescription. Professor Yunus must be aware that an official request has already been made on 10.12.06, in response to an appeal by the Durniti Daman Commission (a new and supposed to be independent version of the former Anticorruption Bureau) to enquire on the allegation of illegally smuggling out of Bangladesh, thousands of crores of taka (worth a few thousand Nobel prize money and the highest-scale corruption in a single sector which evidently made Bangladesh much poorer and the drainage of huge amount of money is still continued) by the Grameen Phone and the Grameen Bank. The complaint also includes illegally snatching sky-high interests by bluffing the 70 lac simple women folk borrowers. The matter was published on 04.12.06 in the Daily Ittefaq too. According to a report published in the daily Ittefaq on 18.12.06, Professor Yunus confessed that a share holder of Grameen Phone is responsible for illegally snatching crores of taka from the poor people of Bangladesh. Grameen Phone was enjoying the monopoly of mobile phone business since 1996. Recently, in the competitive market, they had to drastically reduce the price of their sim cards to Tk. 500/- from Tk.1,50,000/- (!) , call charge per minute to Tk.0.80 from Tk. 7.00, recharge system to monthly/biyearly/yearly basis from only 21 days, which obviously makes the allegation of illegally smuggling out of Bangladesh, thousands of crores of taka justifiable, on the basis of their more than 1-crore subscribers. It is not unknown anymore to anybody that because of the friendship with Mr. Clinton (since his studentship) and Ms. Hillary and the service of President Clinton as the “Chief Publicist” of Professor Yunus and “many other reasons ” which pleased (!) the western world, Professor Yunus was a top favorite person to the West. Therefore, the people certainly has the right to ask Professor Yunus, how effective was his influence (backed by the interested powerful western countries) in getting the right of monopoly mobile phone business in the country for Grameen Phone and which government(s) and govt. servant(s) were responsible for giving that gift of monopoly, and why he is admitting all these now after thousands of crores of taka have already been looted out illegally from the poor people of Bangladesh and why didn’t he unveil the conspiracy beforehand. Regarding Grameen Bank, let a research oriented write-up styled as “Grameen Bank : Poverty alleviation or elevation” (1994), published in 1995 in largely circulated dailies and periodicals be referred to. The research work was sent to many places both at home and abroad including Grameen Bank, Ministry of Finance and Bangladesh Bank for their comments and necessary action. Later, many similar write-ups and letters on Grameen Bank and NGO’s have also been published, each in the largely circulated dailies and periodicals in the last more than one decade. But no reply has yet been received from any authority including Grameen Bank. Although, there were many allegations against Grameen Bank in those write-ups and letters, only 4(four) of them are placed today. (1) Effective minimum rate of interest on general loans of Grameen Bank is 36% (correctly 43.63%). (2) It is better to take loans from the blood-sucking money lenders offering loans @ 219% interest than from Grameen Bank, because of the additional hard conditions of Grameen Bank, besides interests. (3) The propaganda that “Grameen Bank gives loan without any security” is nothing but a complete bluff. (4) The Western countries become very happy if a portion of their uncountable and surplus wealth from the sale of arms is reinvested in the exorbitantly high interest oriented poverty business, since they get hardly any place to invest such a huge wealth with guaranteed return. Elaborate discussions have been made in the above mentioned write-ups. In a recent interview with the TV channel-I, Professor Yunus, on the question of money lending at exorbitantly high rate of interest replied “various comments are normal in new kinds of ventures”. No, Dr. Yunus, your such answers or even hundreds of foreign Nobel certificates aren’t acceptable answers to the very serious type of allegations against Grameen Bank. Therefore, I would expect the family members of Professor Yunus to revolt and pressurize him either to accept the serious allegations like making the motherland poorer to a great extent and illegally snatching sky-high interests by bluffing 70 lacs of simple women folk borrowers or to face the long over due challenges with courage and honesty, by arranging a seminar in the presence of a patriotic media. On the question of root causes of corruption, well-planned poverty sustainability and moral degradation programs, discussions have been made in the above mentioned write-ups and also in a recent world wide widely publicized (more than 6090 international sites including Wikipedia and Guardian Unlimited, many commercial CDs have also been brought) article titled “100-Dollar Laptop: UN Secretary General’s Office shouldn’t be used for exploiting the poor”. Nazmul Huda 38/10 Siddheswari Road, Dhaka-1217
I was appalled to hear that someone can be awarded a prize for leasing to the poor. This has got to be the most insulting award for the decade. How could anyone in the 21 century not understand what happens when you lend money to people, especially poor people. 2 out of 10 may prosper but the other 8 will suffer. The man has blatantly made money out of the poor and you choose to award him ? May I please quote Psalms 5 before you think of disregarding my statement as rubbish. please note verse 6. 1] Give ear to my words, O LORD, consider my meditation. [2] Hearken unto the voice of my cry, my King, and my God: for unto thee will I pray. [3] My voice shalt thou hear in the morning, O LORD; in the morning will I direct my prayer unto thee, and will look up. [4] For thou art not a God that hath pleasure in wickedness: neither shall evil dwell with thee. [5] The foolish shall not stand in thy sight: thou hatest all workers of iniquity. [6] Thou shalt destroy them that speak leasing: the LORD will abhor the bloody and deceitful man. [7] But as for me, I will come into thy house in the multitude of thy mercy: and in thy fear will I worship toward thy holy temple. [8] Lead me, O LORD, in thy righteousness because of mine enemies; make thy way straight before my face. [9] For there is no faithfulness in their mouth; their inward part is very wickedness; their throat is an open sepulchre; they flatter with their tongue. [10] Destroy thou them, O God; let them fall by their own counsels; cast them out in the multitude of their transgressions; for they have rebelled against thee. [11] But let all those that put their trust in thee rejoice: let them ever shout for joy, because thou defendest them: let them also that love thy name be joyful in thee. [12] For thou, LORD, wilt bless the righteous; with favour wilt thou compass him as with a shield. I personally hope for mercy and forgiveness but awarding the culprit is ridicule.
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