March 3rd, 2011
Econintersect: The Bangladesh Government has ordered Muhammad Yunus removed as a managing director of Gameen Bank. Yunus won a Nobel prize for his work in microfinance, a system that provides opportunity for the impoverished to get small loans to establish and operate businesses. The bank's Board of Directors is backing Yunus and has filed a high court petition to reject the government action. Yunus founded Gameen bank.
Follow up:There are political undertones in this disagreement. Yunus is an outspoken government critic and has, in 2007, tried to form an opposition political party. The party would have opposed Prime Minister Sheikh Hasina with the support of the Bangladeshi army. An AP article says that Yunus and Hasina have "frosty relations."
According to The New York Times:
Muhammad Yunus, the Bangladeshi economist and Nobel Peace Prize winner who pioneered tiny loans for village entrepreneurs as a way to fight poverty, has been forced out of the bank he founded, the government-appointed chairman of the bank said Wednesday.
But Grameen Bank disputed that assertion by the chairman, Muzammel Huq, saying in a statement that Mr. Yunus was “continuing his office” while it sought legal advice.
Mr. Huq said that Mr. Yunus had been terminated as managing director by the central bank, Bangladesh Bank, because of a technical violation of the law that had created Grameen. His appointment should have been approved by the central bank, Mr. Huq said, but it was not.
“He was relieved of his duties for noncompliance,” Mr. Huq said.
Bangladesh Bank sent a letter to Grameen outlining what it said were violations of the law that governed the bank and stating that Mr. Yunus had been relieved of his duties. The bank insisted that the board had not acted on the letter.
According to the AP, Yunus is charged with failure to comply with a law requiring that he retire at age 60. Yunus is 70.
A report in the Financial Express states that Gameen came under fire last year when a Norwegian accused the microfinance institute of diverting aid money to sister organisation, Grameen Kalyan. Yunus denied committing any wrongdoing.
The Washington Post reports that the U.S. government is "dismayed" by the bangladesh government action. The WaPo wrote:
U.S. Ambassador James F. Moriarty met with the country's finance minister, Abul Maal Abdul Muhith, in the Bangladeshi capital of Dhaka on Thursday. He told reporters afterward that the United States is "deeply troubled by the process here that is trying to remove Professor Yunus. It is an unusual way to handle a Nobel laureate who is considered outside the country as one of the greatest Bangladeshis."