Dr. Yunus and the future of Bangladesh

By Abdullah Momen The Bangladesh political culture is at a historic turning point. The seizure of the ill gotten wealth of the professional corrupt politicians is a welcome signal to all corrupt politicians and bureaucrats that there is some form of accountability left in an otherwise completely lawless political environment. To complement the elimination of the corrupt and looter politicians and bureaucrats the country desperately needs positive minded and honest leaders and politicians to come forth and take up the onerous and glorious task of building the country. Dr. Yunus "Professional" politicians stand discredited and disgraced in the eyes of the people. They have ruled the country uninterruptedly for the last 15 years and have brought the country to the brink of disaster. Dr Yunus's entry into politics is a major development for Bangladesh. Dr Yunus is an outstanding person who has created one of the most successful banks for the poor and which has culminated in a Nobel Prize. His decision to join politics has been widely welcomed by Bangladeshis across the nation; he brings to politics a level of achievement and wisdom that is sorely missing amongst the professional politicians. Many patriotic and progressive people support Dr Yunus's entry into politics as the only way of breaking the stranglehold of the BNP and AL on the political life of the country. Others are a bit more circumspect, taking a wait and see attitude. There has been some concern whether Dr Yunus represents the same forces that currently hold sway in Bangladesh, namely Western capital internationally and domestically corrupt officials who collaborate with corrupt politicians. There is also concern whether Dr Yunus has the staying power to survive in the country's rough political climate. Dr Yunus needs to demonstrate his staying power, spell out his vision for Bangladesh and state his principles and political beliefs before this group will decide on whether to support him or not. Is Dr Yunus a front man of Western capital? In the last week of February 2007 a book was launched in Dhaka with a lot of fanfare that claimed to expose Dr Yunus as a conduit of international capital and a blatant promoter of "capitalism." One would indeed like to know the relationship of a new political aspirant like Dr Yunus with international capital and with our neighbour. A cursory investigation shows that Dr Yunus is in fact a product of Bangladesh and is a patriot driven by a vision of removing poverty from Bangladesh. A number of questions have been raised about the source of the asset base of Grameen Bank and whether this is mostly drawn from Western capital. As of 2002 Grameen Bank had assets worth $3 billion of which 93% was from local depositors. Much has been made by the detractors of Dr Yunus of World Bank's loan of $100 million to Grameen Bank given in 1996; such loans from multi-lateral lending agencies constitute less than 5% of Grameen Bank's assets. Hence, to claim that Grameen Bank is a creation of Western capital simply does not tally with the facts. Is Dr Yunus promoting 'capitalism'? A major criticism of Dr Yunus is that he is promoting "capitalism" and which, in the eyes of some people, cannot provide a solution to the problems of Bangladesh. What these critics fail to understand is that the term "capitalism" is too vague and needs to be understood more precisely. In Bangladesh today there are three main forms of capital, namely state capital, private capital, and non-profit private capital, which we henceforth call NGOs (non-government organizations). State capital includes the so-called public sector industries, banks, and other corporations dealing with electricity, gas, the infrastructure, and so on. In Bangladesh, state capital is the most pernicious and destructive form of capital. What the critics of capitalism have in mind is most probably Bangladeshi state capital. One should not confuse private capital with state capital. In Bangladesh, private capital is further divided into productive capital and looter capital. In advanced capitalist countries looter capital is marginal and is part of the criminal underworld. In contrast, in a developing country like Bangladesh, since private capital has only started to form over the last three decades, looter private capital is unfortunately a major component. Private looter capital is composed of businessmen who are mostly themselves either corrupt politicians, or else form a nexus with corrupt politicians and corrupt bureaucrats to loot the country's wealth. The present caretaker government is playing a positive role in arresting leading elements of looter capital and making them accountable to the law of the land. In Bangladesh productive private capital begins only in 1975 and has since then created many new industries. For example, in 2006 the private sector employed almost 3 million workers and exports from only the garments industry amounted to almost $7 billion. Productive private capital is the main engine of economic growth in Bangladesh today and should be strongly supported in an all round manner. In the 21st century all countries of the world, including self-declared socialist countries like China and Vietnam, have realized that private entrepreneurs are a valuable national asset. The ability and willingness of entrepreneur to take great personal financial risks in launching new ventures is a crucial ingredient in the expansion of a country's economy. In developing countries the private sector of the economy needs to be led by a powerful political leadership that formulates comprehensive policies for economic development and ensures that the looter section of private capital does not gain the upper hand. As has been seen in country after country in East Asia, explosive social and economic growth is a very realistic goal that can be achieved with a competent leadership at the helm of affairs. The concept of social business enterprise that Dr Yunus has proposed is a powerful means for developing a healthy and productive private sector. A social business enterprise has two criteria for its success namely: a) how much profit it makes, and b) how much social progress it brings. To succeed, such an enterprise needs competent and dynamic leadership. The concept of social business enterprise is a proposal for reforming world capitalism and is being seriously discussed in the West; it is being taught in universities in France and the UK and there is talk of even setting up a stock market for such businesses. The concept of a social business enterprise would provide a useful framework for eliminating looter capital in Bangladesh and evolve a form of productive private capital that is both profitable and socially responsible. Some critics of Dr Yunus point out that the idea of social business enterprise is simply a re-packaging of the concept of corporate social responsibility. Although there is an element of truth in this statement it misses the main point. Just as Al Gore provides a focal point, a human face, to the global need for addressing environmental problems, Dr Yunus provides an international icon for the much needed reform of international capital from a purely profit seeking organization to a social business enterprise, where social benefits are also a major consideration. Far from being a negative factor, the fact that Dr Yunus will foster the growth of the productive private capital is one of his strongest points. Being himself accountable for all his capital investments, Dr Yunus understands the nature of productive private capital. Furthermore, his exposure to foreign private NGOs and other forms of capital has had a modernizing effect on him, making it clear to him that in this globalized world Bangladesh has to perform and measure up to international standards if it is to survive and prosper. Can Dr Yunus provide good governance for Bangladesh? The main purpose for supporting a democratic system is because it provides a mechanism for electing leaders into power who can provide good governance and thus lead the country towards prosperity. So the question that needs to be addressed is whether Dr Yunus can provide good governance. Can he make a difference in eliminating corrupt politics and corruption in the bureaucracy needed for good governance? Dr Yunus does not have any political experience and hence many people are unsure whether he can bring about good governance. Lack of experience is a negative factor but this is also a positive feature since Dr Yunus is a fresh and uncorrupted force in what is otherwise a dishonest and crooked political environment. Dr Yunus brings a level of competence and quality that is currently absent in the political leaders of Bangladesh. The Grameen Bank is part of the larger effort of the NGOs, which in Bangladesh have spread far and wide; they have created networks, mostly in the villages, that reach the poorest elements. Religion based NGOs are also active and mostly concentrated in religious schools. Whether one likes it or not, the NGOs have over the last 30 years matured into a significant social force, and it is necessary to take them into account to understand the political landscape of Bangladesh. NGOs are non-profit organizations based on private donations; hence their social and economic position is in-between state capital and the profit-driven private sector. NGOs are largely focused on development work and poverty alleviation and in this sense operate in the same areas of society as the government. However, unlike the government, which is largely unaccountable due to corrupt political leadership and hence does not have any measure for its performance, the NGOs are more result oriented: most of the (foreign) donors demand some tangible proof that the money disbursed by them has been effectively used. NGOs, similar to the private sector, are penalized for their failures and are rewarded for their efficiency and productivity; success allows for greater access to support from local and overseas sponsors. The NGOs have empowered the people, in particular the women, by making the people look towards themselves for solutions instead of waiting for the government to address their problems. The NGOs have created new social networks for solving social problems and in doing so have created a whole new generation of grassroots leaders. Dr Yunus's work with the Grameen Bank has shown his ability to organize and mobilize the poorest sections. For example, about 6.5 million poor rural women -- one of the most marginalized sections of the country -- account for more than 97% of the clients of Grameen Bank. Dr Yunus has shown, unlike many urban oriented leaders, a consistent and sincere commitment towards the poorest sections of both the urban and rural population. In particular, Dr Yunus understands the urgency of removing poverty by developing the economy by one's own efforts and has the optimism and organizational ability for accomplishing this task. Some critics point out that Bangladesh, as a nation, is not one giant NGO since logically the government of Bangladesh cannot be itself be an NGO. Hence these critics question whether the success of Dr Yunus in doing social work can be transferred to the larger task of good governance and of giving leadership to Bangladesh as a whole. There are many reasons why Dr Yunus has the potential to succeed as a national leader. He has shown immense organizational abilities and creativity in building a vast institution such as Grameen Bank in a matter of only 30 years. Dr Yunus has shown that development cannot take place through handouts but instead needs the people to take charge of their own lives. Dr Yunus has the international stature and vision needed for leading Bangladesh into the global economy. And most importantly, Dr Yunus has grown and developed as an institution independent of government control and without subordinating himself to, or colluding with, corrupt bureaucrats. The main obstruction that Dr Yunus will face in modernizing Bangladesh is from the entrenched powers, which consists primarily of the nexus of corrupt bureaucrats and officials, corrupt politicians and corrupt businessmen. Corrupt officials make impossible the implementation of the best of policies. Corrupt officials are like a cancer in the governance of Bangladesh and are easily the chief domestic obstacle to national development and to the country's modernization. Some critics have raised the questions on the connection of Grameen Bank to the bureaucracy and to corrupt officials in general. One can see from the cross-section of officials of Grameen Bank that there are no corrupt ex-bureaucrats holding important posts and those personnel who are ex-civil servants occupying the higher echelons of the bank are persons of high integrity and honesty. A pre-condition for good governance is to make the government machinery a positive force that facilitates national development. Political parties for the last 15 years have grown and come to power by colluding with corrupt officials and so were never in a position to reform and curtail the corruption of government officials. In contrast, one of the most important positive factors about Dr Yunus and the Grameen Bank is that they have grown as an institution independent of bureaucratic patronage and hence Dr Yunus is not beholden to corrupt officials. It is fair and accurate to conclude that Dr Yunus is neither beholden to Western capital nor to the nexus of corrupt professional politicians, corrupt civil servants, and corrupt businessmen. Dr Yunus is the only person on the political scene who has the potential of carrying out the historic task of reforming the government machinery and transforming it into a positive factor contributing to the growth of the country. One can only hope, for the sake of the very survival of the country, that he does so. Dr Yunus made a significant statement on February 23 in which he declared his entry into politics by floating his party called Nagorik Shakti and expressed patriotic and progressive principles. Dr Yunus's experience in working with the poor and uneducated masses will prove invaluable if he has the opportunity of leading the task of modernizing Bangladesh. Dr Yunus represents a breed of honest and patriotic Bangladeshis; it is vital that all right thinking people of the country lend him wholehearted support. Only if Dr Yunus succeeds will many other honest and patriotic individuals -- who have so far kept away from politics due to the fear of the money politics as well as fear of the musclemen, gangsters, and thugs of the major political parties -- take heart and find the courage to join politics and contribute to the task of nation building.

Source: http://www.thedailystar.net/2007/03/30/d703301501122.htm