I HAVE MIXED feelings about Dr
Muhammad Yunus getting this most prestigious award, the
Nobel peace prize. On the one hand, I am happy for him, but on the other, I am worried if Dr Yunus’ immense popularity — only rivaled by Sheikh Mujib’s in 1971 — would be fully taken advantage of by Bangladesh. At least more than a billion people globally read, watched and heard this image-boosting news. And, I know the average people do not know or care to know how a particular physicist, chemist, medical-researcher, physician, economist, writer or a peacemaker got the prize. How many Indians can precisely tell as to why Amartya Sen got the prize? It is a billion-dollar question. On this token, Dr Yunus’ prize matters most to people in Bangladesh and abroad,
not what fetched this prize.
I have no problem with that. I also personally feel — as I personally know Dr Yunus — that he is out and out an honest man. He is not the type who would make money by his projects. My only problem is my skepticism about micro-credit as the panacea to all evils related to poverty and backwardness.
I was a big admirer of Grameen Bank up to 1996. After undertaking my book project to work on women and Islam in Bangladesh in early 1996, I spent a few months in Bangladeshi villages doing field work, examining the impact of NGOs on the poor villagers, especially women. I also looked into the problem of the ongoing confrontation between NGOs and village mullahs. I interviewed a cross section of the population, reviewed literature, both pro- and anti-Grameen — there are tons of anti-Grameen literature, both in print and web. And, by early 1997, I was skeptic about micro-credit’s efficacy in eradicating poverty among the poorest of the poor.
Later in 2001 and early 2002, I spent two months in villages in Comilla, Sylhet and Dhaka districts, with my students as their supervisor (anthropology and ethnography). My students, without my prompting, told me that they found non-Grameen villagers were much better off than those who had taken Grameen loans. Some villagers proudly asserted: “Sir, we did not allow the Grameen to open its branch in our village. And, as a result, we are much better off than some neighbouring villagers, (who are indebted to Grameen) by the grace of Allah.”
Most unfortunately, contrary to what Dr Yunus has been telling us, the poorest of the poor simply do not or cannot get Grameen loan, as they simply cannot service any loan at any interest payable in 52 instalments in one year. There is no remission, exemptions or leniency. Defaulters part with tin sheds, utensils, goat and cattle. This came out in so many newspapers in Bangladesh and researchers (even admirers of Grameen) found out on the field.
My only objection to Grameen is its over-reliance on Western donors, who give money for micro-credit, some rural development but never on building roads and highways, railways and power generation. If and when Western donors give money on such projects, the bulk is eaten by their “experts” and spent on buying their equipment and stolen by our ministers and bureaucrats.
I have another problem with Dr Yunus. He has been telling us the story of his bank. How he lent a small amount to one poor Sufia at Jobra village in Chittagong, which she duly returned after she sold the baskets, etc. But that loan he gave to Sufia was interest-free and he did not ask her to repay the loan in 52 instalments, but when she would have the capacity to repay. Is the Grameen doing the same? No, Grameen does not afford to pay credit to the absolute poor (3 crore — Daily Star; Oct 17) and 6 crore (if we take the people below the poverty line, earning less than a dollar a day in Bangladesh). Dr Yunus admits that nothing can be done to the poorest of the poor, who starve days together. Even if you give them totally interest-free loan, they cannot service the loan if you ask them to pay in instalments, from week one. The cow a poor villager buys will take about a year to give milk (you can’t buy a milch cow in Bangladeshi cattle market, unless it is a distress sale during floods or drought). So, the poorest like Sufia will have to wait for a year to make any money from the cow to repay the loan. So, who gets the loan? The category above the absolute poor, with some land, some earning members — sons, husbands.
I am aware of the fact how traditional moneylenders (mahajans) fleeced the poor in Bengal. They charged 96 per cent to 200 per cent and even more as interest. Even now, many Grameen borrowers are engaged in money lending business, often men controlling the women borrower. I don’t blame Grameen for that as it can’t fight patriarchy and mullahcracy in the village.
Poet Rabindra Nath Tagore started a beautiful rural banking system in the 1905 at a village called Patishar in Naogaon district. Tagore’s bank, called Patishar Bank, was very similar to Dr Yunus’s Grameen Bank. But the beauty of Tagore’s bank was that it charged no interest from the borrowers. I, however, do not mean that such interest-free banking is ever viable on a larger-scale for long.
I do believe that Dr Yunus has a vision and that Bangladesh should celebrate this award. But I have some problems in reconciling with the idea that Bangladesh should allow a free hand to donor agencies and overseas investors to get extra privileges at the cost of the nation. If duty-free or tax-free investments benefit the nation, there is no problem. However, we cannot be that naïve in agreeing to import goods to the detriment of our agriculture, health or ecological balance in the long run. We must not allow multi-nationals like Monsanto to market genetically modified seeds in Bangladesh. Donors seldom bring prosperity to the receiving country. One may look at the Narmada Dam project in India sponsored by the World Bank to the detriment and destitution of more than a million peasants in Gujarat.
It is not fair to charge around 28 per cent interest from the “target group” or the poor borrowers (the poorest don’t get the loan, at all), while the Grameen Bank gets that capital from Western donors at a very low interest. Due to high cost of servicing micro-credit the Grameen Bank has to charge high interest. This is the hard reality. So, there is no substitute to good accountable government for development. One may cite Lee Kuan Yew, the father of modern Singapore, who has written and asserted publicly that had Singapore listened to the IMF and World Bank, by the 1990s country would at best have been at the stage of Sri Lanka in terms of development. Similarly Bangladesh, taking Lee Kuan Yew and Jawaharlal Nehru, the great visionaries of our times as inspirers, should come out of the dictates of donor agencies, including the IMF and World Bank.
My reservations about Grameen Bank have only one objective: Bangladesh should not let loose the demon of micro-credit at the cost of its long-term interest. I am neither enamored by the mega NGOs. You would be surprised to learn that how exploitative the mega NGOs like BRAC could be for the average Bangladeshis. How many of you know that a Nakshi Kathar Sari you buy at Taka 12,000-plus at Aarong shops, run by the BRAC, is a by-product of slave labour? It pays around Taka 500 to the village woman who makes the embroidery on the Nakshi Katha Sari. And, it takes her about a month to complete one sari.
The Grameen Bank in the last quarter century lent money to 6.5 million Bangladeshis, mostly women, belonging to the middle peasant or moderate poor categories of people. The poorest of the poor do not get the loan as they simply cannot service the loan. But we all the time hear that story from Dr Yunus about Sufia Khatun of Jobra village in Chittagong, who returned his small loan on time. Sufia Khatuns are not Grameen clients any more, although this myth is very overpowering. Now, the Grameen has served 6.5 million in 25 years. How many of them crossed the poverty line upward, we do not know. And, how many decades will it take to cover the rest of the poor is a tricky question. Around 40 per cent of the population live below the poverty line — 3 crore among them in absolute poverty.
A Bengali daily,
Prothom Alo, (October 19, 2006) published an interview with Dr Yunus, who was generous enough to tell that the
Nobel peace prize was meant for the people of Bangladesh. Fair enough. One is comforted by his modesty and love for his people. The same paper published news on the front page about poor villagers starving for two to three days at a time in parts of northern Bangladesh as they have no jobs or money to sustain themselves. One wonders, if micro-credit could help them out. Unfortunately, the answer is “no”. The poorest, around 40 per cent of the population, cannot get micro-credit as they cannot repay their loans in 52 instalments, as they do not have enough assets to support themselves and service the loans at the same time.
However, there is good news that Dr Yunus might join politics and float a political party. I am all in favour of this move. If he resigns from Grameen and become the leader of a political party, and picks up honest and able people from various groups (not from Jamaat and Ershad’s Party), I see there is a hope for the poorest. Microcredit alone cannot eradicate poverty at every level. Since poverty is a political problem, its solution is also a political one. If he comes to power, builds mega power generation plants, spreads mass education, healthcare and looks after good governance, in another 10-15 years, there could be altogether a different Bangladesh, developed and self-reliant. Nothing short of large-scale industrialization can make the country prosperous. If Japan and South Korea, having worse land-man ratio than that of Bangladesh, could perform the “miracles”, Bangladesh has no reason to lag behind for an indefinite period.
Since there are no clear-cut rules about the eligibility for the
Nobel peace prize, and since so many non-deserving people got it in the past, we should be happy for Dr Yunus for getting this most coveted prize. Bangladesh should take full advantage of this prominence that this prize fetched to the nation. Mere celebrations will not do any good in the long run. Dr Yunus’s active participation in politics could go to the advantage of Bangladesh as he could draw support from lots of honest and capable people, who in the long run would build a prosperous nation free from external and internal pressure.
For achieving this goal, Bangladesh must distance herself from the donor-driven projects and the NGO culture. The people must understand that neither “politics” nor “government” is a dirty word, provided they remain clean and accountable from global hegemons and their local agents. Nothing will make me happier than seeing Dr Yunus surrounded by people with nationalist fervour and zeal believing in good governance as the only step towards development. With his immense popularity he must not fail in realizing the goal – sustainable development through good governance, not through donor-driven projects or dependence on foreign aid.
Meanwhile, the government should ensure Dr Yunus full protection from Harkatul Jihad types of fanatics and others who might pose a threat to his life.
Taj Hashmi, PhD, Fellow, Royal Asiatic Society, is professor, security studies at the Asia-Pacific Center for Security Studies, Honolulu, Hawaii. His publications include Pakistan as a Peasant Utopia (Westview Press, Boulder 1992) and Women and Islam in Bangladesh (Palgrave-Macmillan, New York 2000) and Islam, Muslims and the Modern State (co-ed), Palgrave-Macmillan, 1994.
