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Zafar Sobhan is editor of the Dhaka Tribune, a daily newspaper.

Bhagwati is utterly wrong on Yunus

Bangladeshi Nobel laureate Muhammad Yunus launched a court case to reverse the government’s order to dismiss him as the head of the Grameen Bank. PTI

hat on earth could have possessed Professor Jagdish Bhagwati to pen such an ill-informed and ill-considered op-ed on the row between Nobel laureate Muhammad Yunus and Bangladeshi Prime Minister Sheikh Hasina in last Sunday's Times of India?

The piece is so wide of the mark and tendentious that even the good professor's erstwhile admirers are embarrassed for him and baffled as to how such a once-reputed intellect could make such a specious argument. It is a truly bizarre piece of writing. So keen is Bhagwati to up-end conventional wisdom that he is reduced to clumsy Soviet-style propaganda on behalf of the Prime Minister, making claims for her that would make even her most sycophantic of supporters inside the country blush with shame. He is equally keen to discredit Yunus, unleashing a volley of accusations and insinuations that are exceeded in their inaccuracy only by their obvious pettiness, telling us more, I am afraid, about the man making them than the man they are aimed at.

He opens by sneering that Yunus is not the pioneer of micro-credit, a claim that Yunus has in fact never made, and then bashes Grameen for accepting donor funds, sneaking in a damning mention of "charges of malfeasance" without sharing with his readers the fact that the charges have been thoroughly discredited. In point of fact, Grameen stopped accepting donor funding in the 1990s, and is now funded entirely by deposits, quite an achievement given that it has $1 billion of loans outstanding to 8.3 million borrowers. Further, Grameen is a well run and properly audited bank, with total deposits in excess of $1.4 billion, and there is no question of the bank using donor funds to "cover up losses," as Bhagwati ominously suggests.

He next conjures up out of thin air a groundswell of Bangladeshi popular resentment against the "vast influx of donor funds" that Grameen in fact has not received for over a decade. To the extent that anyone even makes this argument against other NGOs, it is only a tiny minority of religious fundamentalists and embittered lefties, who will doubtless be thrilled to have their views endorsed by such an eminent ally. Bhagwati is finally undone by his inability to write a column without turning it into a brief for neo-liberalism, however irrelevant (or, as in this case, ruinous) this might be to the argument at hand. He cannot help but end with a little homily on the need for economic reform, and identifies Bangladesh's "largely unreformed macro-economic policies" as the principal cause for our apparent backwardness. But his parting jibe that "Yunus' Grameen Bank puts at best a micro-economic finger in the leaky dyke of Bangladesh's largely unreformed macro-economic policies" hardly helps his case, in fact quite the opposite. To the extent that it is true (debatable at best), then how exactly is this Yunus' fault? He is not responsible for macro-economic policy. Surely, the target of Bhagwati's ire should be the political party that has most opposed such reforms.

Oh wait, that would be ... Sheikh Hasina and the AL.

rilliantly, in his apparent inability to resist shoe-horning his brief for neo-liberalism into his case against Yunus, Bhagwati ends up by castrating his own argument. He will also have to find a new neo-liberal champion other than Sheikh Hasina, who would be appalled to be cast in this role. Where he gets the idea that the Prime Minister is some kind of neo-liberal reformer is anyone's guess.

No one with even passing familiarity with Bangladeshi politics would make such an absurd suggestion, and the only conclusion that can be drawn is that Bhagwati does not care enough to make even the most cursory check of his facts.

If only he had done a little more research before putting pen to paper, he might have saved himself considerable embarrassment. But Bhagwati saves the best for last, concluding with this classic: "Can we hope that the Grameen affair will be a prelude to the fight for the liberal reforms that will transform the Bangladeshi economy?" This is high comedy. If Bhagwati wants to see liberal reforms transform Bangladesh, it is hard to see how the government taking control of Grameen Bank against the express wishes of its 8.3 million owners advances the cause.

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