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Microfinance Pioneer Grameen Bank Weakened by Bangladeshi Government Meddling

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Prime Minister Sheikh Hasina of Bangladesh seems bent on destroying the best elements of the Grameen Bank whose loans to poor women inspired a global movement now enabling more than 135,000,000 borrowers to become self-employed. More than a year ago, she engineered the spectacularly illogical dismissal of Prof. Muhammad Yunus, Nobel Prize-winning founder and Managing Director of Grameen Bank. Hasina rode roughshod over the bank's own board decisions and by-laws in imposing a mandatory retirement on Prof. Yunus ostensibly because of his age. (She seems not to have been troubled by issuing that dictate through her Minister of Finance who himself was many years older than Prof. Yunus.)

But not content to have removed Prof. Yunus, whose worldwide fame seems both Bangladesh's most notable asset and Prime Minister Hasina's most aggravating envy, she has now moved to gut the Grameen Bank's fundamental premise of governance: that the women who comprise the bank's clientele should have a controlling voice in its policies and programs. In a region not notable for women's rights, this leadership position by the Grameen Bank has been salutary for the bank, a model for other institutions, and an inspiration to all those seeking to advance the well-being of women and their families.

What exactly is Prime Minister Hasina's latest plan? Very simple. Trash the Grameen Bank's historically successful model of a borrower-dominated board that has the power to elect the Managing Director of this bank in which they are the leading shareholders. And replace that process with what? Let's see. What could be the most disempowering, backward, ham-handed, intrusive alternative one could imagine?

Eureka! Have the government-appointed Chair of the board summarily appoint the Managing Director! Forget about the decades-long organic evolution of women's leadership in both governance and management at Grameen Bank. Just empower Hasina's crony Chair to install a Managing Director who will reliably turn the bank into a compliant arm of the Hasina administration -- an administration whose appreciation of this international treasure, if such appreciation exists, is no barrier to envy-driven decisions that simultaneously compromise both the bank's all-important independence and the administration's own already-shabby reputation.

It would be easy, and wrong, to dismiss this as a tempest in a teapot. Beyond its role in pioneering microfinance and poverty-reduction programs that have now been adopted worldwide, Grameen Bank is a shining worldwide model of what it means to empower women -- even, especially, poor rural women. These women not only comprise 97 percent of the bank's borrowers, but they actually own more than 95 percent of the equity in the bank. Accordingly and appropriately, women hold nine of the 12 seats on the board. And it is little noted but no small thing that the Nobel Peace Prize accepted by Prof. Muhammad Yunus was actually awarded to him and to those women -- to the bank itself which they have built and, until Prime Minister Hasina butted in, have successfully controlled.

At this moment, a hand-picked Bangladeshi government commission is "studying" Grameen Bank to find ways to "improve and protect" it. Rogers and Hammerstein captured this situation perfectly in The King and I, when the king, reflecting on foreign "allies" increasing their role in Siam, sings, "Might they not protect me out of all I own?"

What can be done? Secretary of State Hillary Clinton visited Dhaka in May to urge Prime Minister Sheikh Hasina and Foreign Minister Dipu Moni to take no actions that would undermine Grameen Bank. In addition, the seventeen women who currently serve in the U. S. Senate have sent a strongly-worded letter to Prime Minister Hasina.

And this communiqué was issued by our State Department in early August:

We call on the Government of Bangladesh to respect the integrity, effectiveness, and independence of Grameen Bank. We urge the Bangladeshi Government to ensure transparency in the selection of a new managing director who has unquestioned integrity, competence, and dedication to preserving Grameen Bank, its unique governance structure, and its effectiveness in bringing development and hope to 8.3 million of Bangladesh's most vulnerable citizens, mostly women.

It has seemingly always been the case that enlightened advances forged over decades by millions of dedicated people working together can be trashed with astounding finality by one misguided "leader." We owe it to those who created Grameen Bank, and to history, to show that such travesties are not, however, inevitable. Citizens wishing to add their voices to this urgent call for preservation of a global treasure can sign on to a petition by searching "change.org Grameen Bank."

This is not a futile exercise. The worldwide firestorm over the ousting of Prof. Yunus still reverberates in Hasina-administration deliberations. A fresh onslaught of petitions on this new issue may give them some pause. And perhaps even more importantly, our loud protests can mobilize the voters of Bangladesh who, ultimately, must decide if their democratically elected Prime Minister should be allowed to demolish their country's most celebrated contribution to its own people and the global community.