Saturday, October 21, 2006

Muhammad Yunus and Bangladeshi politics

It appears that the vicious political atmosphere in Bangladesh may be impacting the performance of Muhammad Yunus and Grameen Bank in the days to come.

Yunus has, over the last three decades, stayed away from politics. Bangladesh has had a very difficult political set up so far. When it was part of Pakistan, the region remained underdeveloped. After 1971 war of independence, Bangladesh's father of the nation Mujibur Rehman could not solve the problems or set the tone for progress for the country. He was assassinated in a military putsch. Whoever was the instigator of the putsch, the real power subsequently descended on Major General Zia-ur-Rahman. Zia-ur-Rahman himself was later murdered in a failed coup, which subsequently resulted in another period of military rule by General Ershad. Ershad was later overthrown by popular revolt, which resulted in reinstating of democracy from 1990 onwards.

However the period of democracy has been quite traumatic as well. Mujibur Rehman's daughter Sheikh Hasina (Awami League) and Zia-ur Rahman's wife Begum Khaleda Zia (Bangladesh Nationalist Party) run the two main parties. Khaleda Zia won her first term in 1991, lost power to Sheikh Hasina in 1996 but recaptured power in 2001. The elections are coming up again now in 2006.

These two parties fight pitched roadside battles. It is common to have country made bombs thrown on opposition rallies. Vengeful ruling party throws the opposition leaders (most of them ex-ministers) in jail on trivial charges. Corruption is rampant. Around the election time, at least few thousand people are killed in violence.

There is a constitutional tradition that when elections draw near, a neutral person is brought in to manage the country and oversee the elections. This change-over process is to happen on October 28th, but the opposition Awami League is not confident of the designated neutral person. They believe the upcoming elections may be rigged, and are threatening to boycott the elections. This has caused a great amount of instability now in the country.

All of this is frustrating to the development-minded people, including Muhammad Yunus.

Yunus had learnt to live with the military rulers. Grameen experiment was going on with the help of Government owned banks during Maj. General Zia's time. It was during General Ershad's period that Grameen Bank was incorporated with the Government holding 60% equity and 40% with the customers of the Bank. Then, through a series of clever maneuvering, Grameen has become 6% owned by Govt. and 94% with the customers.

While Yunus kept quiet during the military rule, with his growing stature and mounting frustration, he is critical of the two leaders. Reported in The New York Times:
"There's no ideological fight between them," Mr. Yunus said of the leaders in an interview here this week. "They go back to what your husband did, what your father did. They have to fight because they came into politics because of their legacy. There's no substance in the politics.
In a country like Bangladesh, that is a very strong reaction. Though true, neither leader will take this lightly. Sheikh Hasina hates Khaleda Zia's husband Major General Zia because Zia exhonerated a lot of people suspected of involved in killing Sheikh Mujibur Rehman. Some may even go so far as to say Zia himself was involved in Mujib's assassination. Khaleda Zia responds back with her own hate of Sheikh Hasina.

This kind of family feud spilling into the administration of country is not good. Such a state of affairs will frustrate any development-oriented person. Frustrated by all this, Yunus has apparently hinted starting a political party himself.

Whether that is good news for Bangladesh or not, it is bad news for Sheikh Hasina and Khaleda Zia. They will both come together to cut Yunus to size. They will realise that Yunus draws his power from Grameen Bank and its millions of members - that is millions of votes. So the politicians will work towards destroying Grameen Bank. Clinging to power is far more important for them than the development of their country.

The Nobel prize has probably made Yunus stronger and bolder. But he has to now constantly watch his back.

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