Musings by Shahidul Alam
The situation in Syria is an object of serious preoccupation and once more the United States, assuming the role of the world’s policeman, proposes to invade Syria in the name of “Freedom” and “Human Rights”.
Continue reading “Open letter to President Barack Obama”
Thorbjorn Jagland, chairman of the Nobel Peace Prize Committee, said today that President Obama ?really ought to consider? returning his Nobel Peace Prize Medal immediately, including the ?really nice? case it came in. Continue reading “Nobel Committee Asks Obama ?Nicely? To Return Peace Prize”
The reputation of a Nobel peace laureate, credited with helping to defeat?global poverty through microcredit, hung in the balance last night after?allegations that he had diverted ?40 million from a bank set up to help the?poor.
Muhammad Yunus, internationally f?ted as banker to the world?s poor, now?faces an investigation by the Norwegian Government, which donated funds to?him.
It marks a further blow to the reputation of microfinance, once hailed as?the most effective way to help the most needy out of poverty.
The model of extending small loans to help to stimulate entrepreneurial?activity was pioneered by Dr Yunus in Bangladesh. It won him the Nobel Peace?Prize in 2006.
But letters obtained by a Norwegian film-maker suggest that Oslo?s embassy?in Dhaka was furious to discover that cash donated to his microfinance?vehicle, Grameen Bank, for housing loans had been diverted to another?company without its knowledge or permission. The arrangement, which Dr Yunus claimed had been made for tax reasons, was not mentioned in Grameen Bank?s annual report.
When his actions were challenged in formal correspondence, Dr Yunus wrote to?the head of an aid agency, Norad, asking for its help.
?This allegation will create a lot of misunderstanding within the Government?of Bangladesh. If the people, within and outside government, who are not?supportive of Grameen get hold of this letter, we?ll face real problem[s] in?Bangladesh,? he wrote.
Dr Yunus was ordered to return the money but while about ?17.6 million was?repaid, the rest of the funds were used for other social causes including?victims of cyclones, according to the Norwegian Government.
The chain of events ? which took place between 1996 and 1998 ? came to light?this week after the letters were aired as part of a documentary on microfinance that was shown on Norwegian television.
Although it said that there was no suggestion of tax fraud, a minister in?the current Oslo administration said that it was ?totally unacceptable? that?aid was used for purposes other than what was intended.
A report into the matter has now been ordered by the International?Development Minister after questions in the Norwegian parliament.
Dr Yunus could not be contacted for comment in Bangladesh last night and?aides said that he was out of the country.
A statement released by Grameen Bank said that the claims were false and?that a full explanation would be provided at the ?earliest convenient time?.
The Nobel Committee stood by Dr Yunus last night, admitting that it was?aware of ?isolated incidents? relating to Grameen Bank when it awarded him?the Peace Prize, but it does not plan to raise any further questions.
The director of the Norwegian Nobel Institute, Geir Lundestad, said: ?The?Norwegian Nobel Committee looked into Yunus and the Grameen Bank very?thoroughly before he was awarded the Peace Prize in 2006, and we used many?international and Norwegian experts to find out about the larger picture and?not just the isolated incidents. On this basis he was awarded the prize for?2006 and we are not raising any questions in this context.?
He refused to clarify whether the committee was aware of allegations of?financial irregularities, saying: ?We have a 50-year secrecy rule. I?m not?commenting on anything else.?
Erik Solheim, the Norwegian Minister of the Environment and International?Development, insisted that there were no suspicions of tax fraud or?corruption committed by the bank.
He added: ?Having said that, the Government of Norway finds it totally?unacceptable that aid is used for other purposes intended, no matter how?praiseworthy the cases might be.
?In the light of an audit review in 1998, Grameen Kalyan returned 170?million kroner [?17.6 million] to Grameen Bank. The additional funds have?among other projects been spent on emergency aid after a devastating cyclone?hit Bangladesh.
?I will ask the Norwegian Agency for Development Co-operation for a full?report into this matter. At the same time it is important to stress that we?are firm believers in microfinance as a tool in the fight against poverty.?
The allegations will further fuel the controversy surrounding microfinance?amid concerns that what has grown into a massive and largely unregulated?industry is doing more harm than good.
The Indian state of Andhra Pradesh, the hub of small-loan activity, cracked?down on microfinanciers after accusations that high interest rates and?aggressive debt collectors had led to more than 30 suicides.
Report in bdnews24.com
Earlier article on Grameen Bank
As more US troops surge into Afghanistan, as Predator drone attacks on Pakistan’s north-western villages increase, as news of operations by killing squads of US Special Forces on the Afghanistan side of the border intensifies, as yet another `front,’ a fifth one, opens up in the US-led war on terror, this time in Yemen?under the presidency of a Nobel Peace laureate?I return yet again to the day which supposedly re-wrote US history, which schematised history anew, into two distinct periods: Life Before, and Life After 9/11. How can I not? Unabated vengeance. More wars. To kill, loot and plunder….
That the prayers of those dubbed as representing the forces of `evil’ i.e., the “al Qaeda terrorists”?practitioners of a “fringe form of Islamic extremism” whose “directive commands them to kill Christians and Jews” (George Bush, September 21, 2001 )?were fulfilled on 9/11, seems to be obvious.
But the prayers of forces representing `good,’ that these too were met on 9/11, is not thought to be similarly obvious. Or, even if it is, it’s not similarly acknowledged. Not by western politicians. Nor by military leaders, defence analysts, security experts, writers, journalists?all those who speak in the name of the west. Who cling to the idea that it was a “surprise attack.” That it was carried out by “a collection of loosely affiliated terrorist organizations known as al Qaeda” who hate “our freedoms.” That it was an “act of war,” not only against the US, but against “civilization.” And that?since these terrorists number thousands and are spread in? “more than 60 countries”?America must declare war against “terror,” one which must be global, the likes of which have never ever been seen before. One that “begins with al Qaeda, but.. will not end until every terrorist group of global reach has been found, stopped and defeated.”
And thus we see newer fronts open up as the niceties of awarding Barack Obama the Nobel peace prize are endlessly talked about in polite circles, ooh, what a sweet gentle hint, ooh these Norwegians are so subtle…
Wars, however, are not subtle. As for the forces of `good,’ unlike those deemed evil, these do not? belong to the fringes. Neither of the American state, nor of western civilisation. They occupy its centre. Which is possibly why `their’ having prospered due to 9/11, is a heretical idea.
But only in the west. Outside its bounds, in the rest of the world, people talk about it. Freely.
In a speech to Pentagon employees on September 10, 2001, Secretary of Defense Donald Rumsfeld disclosed that over $2,000,000,000,000 (yes, twelve zeroes) in Pentagon funds could not be accounted for. “According to some estimates,” he said, “we cannot track $2.3 trillion in transactions.”
His statement didn’t make world headlines the next day. The 9-11 attacks had reduced its colossal significance to dust. As it had, the Twin Towers. But news of Pentagon’s “financial disarray” has never been headlined in western mainstream media. Strange, considering its scale, its enormity. It’d have made many third world governments?often enough unhappy recipients of lectures on good governance, elimination of corruption, accountability?ecstatically happy. May be, that’s why. It’d have undermined the west’s moral authority and of course, you can’t allow the plebs to laugh at the emperor’s nakedness.
Almost $7 trillion has been adjusted in the Department of Defense’s (DOD) financial ledgers, said a report released by the inspector general of Pentagon in 2000, “to make them add up.” Of this amount, no “receipts” were available for $2.3 trillion (presumably the sum Rumsfeld mentioned) (Associated Press, 03.03.2000). An investigative report published a week before 9/11 cites an 8 page summary of the DOD’s deputy inspector general. To compile the required financial statements, it says, $4.4 trillion had to be “cooked”; of this amount $1.1 trillion couldn’t be supported by reliable information. Another $1 trillion, at the end of Bill Clinton’s last full year in office, “was simply gone and no one can be sure of when, where or to whom the money went” (Insight, 03.09.2001 Rumsfeld_Inherits_Financial_Mess[1].pdf ).
Rumsfeld had promised reforms which would help transfer billions of dollars from the “bloated” bureaucracy to the battlefield. But 9/11 happened the next day. Spurred by anthrax fears, Congress soon approved a $40 billion (this has nine zeroes) emergency measure; a year later, the national defense budget totalled $400 billion, biggest since the cold war. It didn’t include Iraq’s occupation costs, covered by a $35 billion supplemental bill. Interestingly enough, the budget was accompanied by a bill, Defence Transformation for the 21st Century, which significantly lessened congressional oversight on military spending (Guardian, 22 May 2003).
So, where did all those trillions go? In this age of euphemism, writes Kelly Patricia O’Meara, the government has its own words for “missing” money. Unsupported entries. Material-control weakness. Adjusted records. Unmatched disbursements. Abnormal balances. Unreconciled differences. Rumsfeld had his own explanation, too. It was because of “gridlock” and not “greed.” “We cannot share information from floor to floor in this building because it’s stored on dozens of technological systems that are inaccessible or incompatible.” DOD, it seems, has hundreds of computer systems which run varied accounts?health care, payroll, inventory,? ones that are not integrated.
Scoffing at what she terms the `computers don’t talk to each other’ explanation, Congresswoman Cynthia McKinney, one of the few truly people’s representative in the US legislature says, when they tell us the money was lost, what it really means is that the money went some place, but they don’t want to tell us where it went.
Business analyst Joshua Daniels adds up the figures and points his fingers elsewhere. The entire US defense budgets from 1996 to 2001, says Daniels, add up to $1.6 trillion. To reach the $2.3 trillion figure, one would have to go further behind, to 1991. Now, its not possible, he says, that the Pentagon spent hundreds of billions and didn’t get a single receipt. Or, that the Government Accountability Office (GAO) failed to notice that the entire defense budget went missing for ten years. After all, soldiers and sailors were paid, tanks and missiles were bought etc. “The missing money wasn’t on the books to begin with. It couldn’t have been; it’s more money than we gave them.” Where could it have come from then? Only the Federal Reserve, says Daniels, has such colossal sums at its disposal, and we should be asking: who hired the Pentagon to do whatever they hired it to do? What are they paying for? Who is its target?
One may not know where the missing trillions went, but that the US military-industrial complex rewards those responsible for the (mis)deed is pretty clear. Comptroller Dov Zakheim (a signatory also to the Project for a New American Century) left Pentagon in March 2004 and joined Booz Allen Hamilton ?the “most prestigious management firm in the world”(Time), which works on defense and homeland security matters?and is now vice-president there. Two former DOD officials, William J Lynn III (chief financial officer, 1997-2001) and Robert Hale (assistant secretary of the Air Force, Financial Management and Comptroller, 1994-2001) were brought back to the Pentagon by Obama, while president-elect, in January 2009, to the posts of deputy secretary of defense, and undersecretary of defense (comptroller), respectively. Hale had been working as chief lobbyist for Raytheon, a major American defense contractor.
Coincidentally, when the Pentagon was hit on 9/11, the “plane” hit an office of the Army where an investigation of the of the $2.3 trillion missing was taking place. The office lost 34 of its 45 employees, most of whom were civilian accountants, bookkeepers and budget analysts?officials who were reportedly working on the investigation. I will not go into the details of why believing the government’s account of what happened at the Pentagon on 9/11 is intellectually demeaning, but quickly quote Colonel Karen Kwiatkowski who writes, “the secretary of defense… in an unfortunate slip of the tongue referred to the aircraft that slammed into the Pentagon as a missile…”
To put the missing trillions of taxpayers money into perspective, O’Meara writes, it would have bought
(a)?? nearly 14 million accounting degrees from any four year state college, estimating the cost at $20,000 per year. Or,
(b)?? about $8 million single family houses costing $140,000 per home.
A far lesser sum, only US$22.6 billion per year, would provide access for all to improved water and sanitation services.
Another way of putting Pentagon’s missing trillions into perspective, one that I read somewhere on the internet, was: if Christ had spent a million dollars a day for two thousand years, by now he’d only have spent three-quarters of one trillion dollars.
He, of course, would have spent it differently.
The 25th March is a significant day in Bangladesh. It was this day, in 1971, when the Pakistani army began its genocide, causing the death of millions, but eventually also leading to the birth of the nation. The Pakistani army had been supported by the United States, who had sent the seventh fleet to the Bay of Bengal in a show of strength, pitting its might against India and its ally of that time, the Soviet Union. The United States also influenced Bangladesh in a very different way. Exactly 57 years earlier to the day, a man born in Iowa was to affect the destiny of Bangladeshis in a profound manner.
Considering that he was one of only few US citizens to receive the Nobel Peace Prize, he was little known, even in his own nation. Amongst Nobel Prize winners, only Rev. Martin Luther King Jr., Mother Teresa, Nelson Mandela and Elie Wiesel have also won the US Presidential Medal of Freedom and the Congressional Medal. Norman Borlaug, the man who prevented a billion people from starving seems to have been easily forgotten. His death on the 12th September 2009, went largely unnoticed in Bangladesh.
Interestingly, the man who is said to be the father of the ‘Green Revolution’ is also blamed by some for having encouraged intensive farming, which some environmentalists feel have led to soil depletion and dependency of farmers. Certainly, a side effect of intensive cultivation is the dependence on both fertilizers and pesticides, effectively a dependence on petrochemical products. While the high yields produced by Borlaug’s techniques are undeniable and revolutionary, the increase in costs of fertilizers and pesticides has resulted in dependence on imports from foreign companies. The rate of increase in rice production in India, for instance, has been far outstripped by the rate of fertilizer intake per ton of rice. Borlaug himself had a simple response to this analysis. There was a need for food, and he provided a way to produce more. He has always said, the real answer was to curb population, but while there were mouths to feed, he made sure there was food to feed them. As a result nations that had been facing a potential famine, Bangladesh, India, Mexico and Pakistan became self sufficient in food. Mexico even became an exporter of wheat. Consequently, Borlaug is credited with having prevented over billion people from starvation.
India honoured him with the Padma Vibhushan, its second highest civilian honour. In Bangladesh he received the first honorary membership of the Bangladesh Association for the Advancement of Science. His success in Pakistan, might have been halted by the all to familiar bureaucratic systems we regularly encounter. When seeds destined for Karachi, reached Los Angeles en-route, a Mexican bank refused to honour Pakistan treasury’s payment of US$100,000, because the check contained three misspelled words. But the seeds did eventually arrive, and eventually led to a doubling of wheat production for both India and Pakistan.
While the new technology has undoubtedly also led to increased profits for corporate agribusiness, Borlaug never patented any of his ‘inventions’ and neither became wealthy nor famous despite the phenomenal transformation he had engineered. Rather, he encouraged its free use, himself working in the fields, training farmers how to maximize their yields.
As the initiator of the Nobel Prize had discovered, what technology eventually got used for, depended largely upon who got to use them. Unlike Alfred Nobel, Borlaug, also of Norwegian descent, never accumulated the wealth to find ways to offset the negative effects of his discoveries, but he remained a dreamer till the end.
“When wheat is ripening properly, when the wind is blowing across the field, you can hear the beards of the wheat rubbing together. They sound like the pine needles in a forest. It is a sweet, whispering music that once you hear, you never forget.”
20th anniversary of Ain O Salish Kendra and National Museum auditorium, Dhaka. Bangladesh
Fazle Hasan Abed (left), Muhammad Yunus (centre) and George Soros (right)
Muhammad Yunus, Amartya Sen, Fazle Hasan Abed, George Soros Sultana Kamal. I could hardly have asked for a better photo op. Well it is Christmas! If ever a nation was in need of a pick me up, this was it. The twentieth anniversary of Ain O Shalish Kendra (ASK) had a special significance. This was an organization that has been relentlessly fighting for the rights of the downtrodden. Despite the central bank predicting a 7 percent growth in the coming year, with both parties poised to contest the upcoming election choosing to woo the autocratic general the people had fought to overthrow, and the traditionally secular Awami League (AL) selling out to the Bangladesh Khelafat Majlish (BKM) for supposed electoral gains, the people needed the assurance that at least some still believed in a secular state and the interests of common people.
Amartya Sen lauded ASK and women?s agencies for the role they had played in upholding the rights of women and talked of the importance of freedom of speech.
Muhammad Yunus reminded the audience of ASK?s role in preserving the legal rights of the poor. Both Nobel laureates stayed clear of commenting on the decision that had been made by the major opposition party, which had just buried all of these ideas for political convenience.
Sen gave an eloquent speech, weaving history and his own characteristic economic analysis to point to the role civil society could play in creating a more egalitarian world.
His witty anecdotes about Salma Sobhan, the diminutive but feisty human rights activist who had founded ASK, and his frank accounts of the attempts by him and his friend, our own celebrated economist Rehman Sobhan, in winning over Salma Banu, before she became Salma Sobhan, was a warm and sincere tribute to one of Bangladesh?s finest citizens. But despite the joy of celebration, the mood in the audience was less than ebullient. The high court ban on fatwas had been a hard won battle and the gloom caused by AL?s entente with the other side of the fundamentalist coin, had left everyone shattered. My activist friends were surprisingly unperturbed. ?Well, they have unmasked themselves? said Khushi Kabir, ?it is time we woke up to what the parties really represent.?
Sultana Kamal was similarly defiant but also brought up her concerns. ?It has always been our fight, and now we know what alliances to avoid. But they have effectively robbed me of my voting rights. If I now want someone in parliament to stand up for the rights of women, or the Ahmadiyyas, or for free speech, whom do I turn to? The candidates too have no choice. The few who might have wanted to enter the fray because they wanted to change things, now have no party to turn to.?
Politicians are not known for honesty and candour. AL?s win at any cost deal was defended by Abdul Jalil, the general secretary of AL who signed the document, as he tried to wriggle his way out of the hole he had dug himself into. ?It is an understanding based on an election strategy? and ?any decision is a fatwa? he rambled.
This particular election strategy seems to have left out the voters from the equation. The latest ?fatwa? by the Awami League is a ?decision? that will haunt them.
It was 1988. The flood waters had reached Dhaka, and I needed a boat to get to the head office of the Grameen (Rural) Bank. A soft spoken unassuming gentleman, casually clad, sat at a plain wooden table. There was no air?-conditioning and the fresh breeze flowed freely through the open windows. My posh camera seemed quite out of place here.
Dr. Muhammed Yunus shook my hands warmly and words flowed easily from the man who had created one of the most remarkable organisations in banking history.
The Grameen Bank gave money only to the poor. Loans to the landless were interest free. None of the debtors had collateral. 75% of the bankwas owned by the landless who could purchase shares of Take 100 (about two pounds; each in 1988. Only one share was allowed per person). The bank boasted 346 branches and 3,000,000 members, 64% of whom were women. Incredibly, about 98% of the loans were returned! It was rapidly expanding and by the following year, Yunus hoped to have 500 branches.
An economics graduate from Vanderbilt University, Yunus had been teaching at Tennessee State University when war broke out in Bangladesh in 1971. He got actively involved in the liberation movement and returned to the newly created nation in 1972 and took up teaching at Chittagong University.
The famine in ’74 touched him deeply. The sight of the dying in the streets made him question the validity of the economic theoories that he espoused. During this soul searching he mixed intimately with the villagers and learnt of their habits, their values and their problems. One of them was a woman who made Moras (bamboo stools). She was skilled and conscientious and worked long hours. He was appalled when he discovered that she earned only eight annas (about one pence) for her daily labour! Angered and dismayed, he sought out the reasons for this shamefully unfair setup.
It had long been claimed that laziness, lack. of skill, and extreme conservativeness was the root cause of poverty in Bangladesh. Here was a woman who was skilled, worked extremely hard and had taken the initiative of setting up a business for herself and was still being cruelly exploited.
She did not have the money to buy the bamboo, so she had to borrow from the trader. He paid a price for the finished stool which was barely the price of the raw materials. She ended up with a penny a day!
With the help of a student Emnath, Yunus made up a list of 42 people who worked under similar conditions. He paid out their total capital requirement of Taka 826 (less than a pound per head) from his own pocket. It was a loan, but it was interest free.
Aware that this was not the real solution to the problem, Yunus approached his local bank manager. The man laughed. The idea of giving money to the poor, and that too without collateral, was to him hilarious. Undeterred, Yunus approached the assistant general manager of Janata Bank:, Chittagong. The manager was encouraging,, but felt that in the absence of collateral, a guarantee by influential people in the village would be necessary. Yunus realised that this would eventually lead to some sort of a slave trade. The bank was adamant, and eventually he talked them into accepting him as the guarantor. The manager was reluctant in the beginning, but felt he could take the risk, the sum being so small.
The system worked, all the loans were repaid and more people were offered loans. Yunus suggested that it was time the bank took over the responsibility themselves and lent out money directly to the villagers.?So I tried to establish that this could be done as a business proposition. I became vocal against the banking institutions, arguing that they were making the rich people richer and keeping the poor people poor through something called collateral. Only a few people could have access to funds. The bankers were not convinced.
Finally they challenged me to do it over a whole district, not just a few villages. They said if I could do it over a whole district, and still come back with a good recovery, then they would reconsider. I accepted their challenge. They asked me to go far away, to where people would not recognise me as a teacher but would instead think I was a banker. So I went to a far flung district in 1978, and started working there.”
It worked beautifully. They had almost a 100% recovery. The small loans made a big difference to the people, but the banks still dragged their feet. Yunus realised that if he went back to the University, the project would die. He suggested the formation of a new bank. One owned by the people themselves. The banks were skeptical, but he got a lot of public support, and eventuual1y in October ’83, an independent bank called the Grameen Bank was formed.
Dr. Yunus is modest about his own contribution. Asked if the bank would survive without him, he smiled “Look at what we have achieved, could it ever have been possible without dedication at all levels ??
There is a more important reason for the bank’s survival. Contrary to most other viable commercial banks, this one is truly designed to serve the people.
Always quick to accept innovations, Professor Yunus was the first person to order an email account when we set up Bangladesh’s first email service in the early nineties. He was user number six, the first five accounts being Drik’s internal numbers. Later he ordered the entire Grameen office to be networked and had generic email addresses issued to key personnel.
The bank now has nearly six and a half million members, 96% of whom are women. The $ 5.3 billion given out as loans and the $ 4.7 billion recovered are figures any commercial banker would be proud of. Since then other Grameen entities under the more recently formed Grameen Foundation have been born. Grameen Phone, a highly successful telecommunications company has provided phones to rural women, many of whom have become successful entrepreneurs. However both the Grameen Bank and micro-credit have had critics. The high rate of interest is seen to be exploitative by many. There have been accusations that the methods of recovery, often by overzealous bank officials, have led to extreme hardship. 
The skyscraper that now houses the bank, many feel, distance it from the poor it represents. The close links with Clinton and Turner, and the uncritical position taken by Yunus in his public interactions with them, has also been viewed with suspicion. Yunus makes light of these observations. Regarding the criticism of his model, he has a simple answer. ?I make no claims to having a perfect system. The problem has to be solved. Should someone come up with a better solution, I would happily adopt it.?
Bangladesh has largely been known for floods famine and other disasters. Yunus has provided Bangladesh with a pride it badly needs. Many had hoped that he would enter politics, providing an alternative to power hungry politicians that people have lost trust in. While he has steered away from mainstream politics, Yunus was an adviser to the caretaker government. That this popular teacher turned banker should be the Nobel Peace Prize winner in 2006 is a source of great joy to Bangladeshis, but an honour they feel was long overdue.
(Photo by Munem Wasif / DrikNEWS)
Shahidul Alam
Drik Picture Library Ltd.
Dhaka 1988 and 2006
High resolution photographs available from Drik Picture Library: library@drik.net
and DrikNews: driknews@gmail.com, driknews@yahoo.com