Kremlinology in Dhaka

Last November 30, Tom Heinemann premiered his documentary Fanget i mikrogjeld (Caught in Microdebt). It showed women in Bangladesh saying they had lost a home or contemplated suicide because of microcredit; revealed an old dispute between the Grameen Bank and Norway over the use of aid funds; and charged Grameen with charging borrowers 30% interest.Talk about the power of the press. Within days, Bangladesh's Prime Minister Sheikh Hasina lashed out at microcreditors. "Many examples are set in Bangladesh...it was an example of wizardry how one could play with people's money." (Video.) As it happens, Hasina also was Prime Minister in 1997, and co-chaired the Microcredit Summit in Washington, DC, with first lady Hillary Clinton. Back then, she endorsed the goal of bringing microfinance to 100 million people by 2005.The Norwegian government quickly released a report declaring the old dispute closed. The Grameen Bank denied any wrongdoing.Even Hasina's finance minister, M.A. Muhith, defended Grameen in public. "I see no fault in the transfer of the fund, if their (Grameen Bank) claim (of doing so under an understanding with the Norwegian government) is true." As it happens, Muhith also was Finance Minister in 1983, when he interceded with the military dictator Muhammad Ershad to enact the ordinance that created the Grameen Bank. He had known Muhammad Yunus since 1971, when both were posted in the United States, Yunus as a student, Muhith as a Pakistan embassy official. They connected in the movement to win recognition of Bangladesh (East Pakistan) as an independent nation.Last week, the government exercised its authority under the Grameen Bank Ordinance to appoint a new Chairman of the Bank, Khondaker Muzammel Huq. (Yunus is the Managing Director.) As it happens, Huq also was a top official of the Grameen Bank in 1982--2003, ending his career there as a General Manager, two steps in the hierarchy below Yunus. Yunus and Huq go back even farther than that: Yunus taught Huq in high school; and in the early 1970s Huq too studied in the States as the revolution unfolded at home.Last week, the government also announced the formation of a committee to investigate the charges raised by the documentary---the use of Norwegian money, and the interest rates. The chief of the committee, Dhaka University economist AK Manow-war Uddin Ahmed, reassured a Daily Star reporter that, in the paper's words, "it's a review not a probe." "We will submit an analytical report to the government after pointing out the weaknesses, if there is any, of the organisations judging from different angles."So is this a healthy fact-finding investigation, which could clear Grameen of some charges and make well-founded criticisms on other counts? Or is it the first step in a government power grab, a prelude to taking over the Bank and sidelining Yunus? I've asked a number of people, Bangladeshi and ex-pat. By and large, they don't know or won't say---and sometimes I can't even be sure which. Perhaps not even Prime Minister Hasina has decided yet. The contrast with India, where there are plenty of open, honest, perceptive voices on microcredit, is striking.Ignorant of local circumstances, I would guess that the government will not go nuclear. Unless the investigation produces surprises, I don't see the documentary as fundamentally changing the political calculus around Yunus and his bank. He is still a Nobel Prize winner, still the most famous Bangladeshi by far, still in that sense the pride of the country.But I could be wrong, for the situation is delicate. My sense from conversations over the years is that Yunus is more loved abroad than at home. In 2007, he briefly tried to start his own political party, which presumably didn't win him many friends in Parliament. Those closest to him have probably come to appreciate the weaknesses as well as the strengths of this great man. For example, he apparently resists sharing the limelight with others who have contributed to Grameen's success. And he has oversold microcredit as a way to put poverty in museums, which I can imagine driving serious Bangladeshi economists bonkers. I sense that Bangladeshis see his imperfections but have not felt it in their interest to speak up till now. Possibly Tom Heinemann's documentary will change that, catalyzing an organization of forces against Yunus and ushering him into retirement.