Rising Food Prices, Yunus Issue Might Backfire

Rising Food Prices, Yunus Issue Might Backfire

In the backdrop of two diverse tight spots the government is increasingly muddying the waters: one is taking shape as a big threat on the domestic front, spurred by skyrocketing prices of food grains and supply shortfall of other essentials. The other issue is taking a bigger dimension on the external front with the removal of Nobel Peace Prize winner Prof. Dr. Mohammad Yunus from the post of the managing director of the Grameen Bank (GB) in a bid to take over it and then to put it in the hand of certain vested interest group closer to the government.

The government is moreover planning at the same time to increase its stake in the bank to over 50 per cent from 25 per cent now to establish control on all operational aspects of the GB essentially reducing the shares of the poor depositors which is now at 75 per cent.

It should be a state-owned bank in contrast to what the immediate past Caretaker Government sought to further reduce public shares to 15 per cent to give it greater independence as the country’s poor men’s bank built on a new growth model based on microfinance.

GB’s women directors

This is where the beauty of the GB lies as it is being run by nine women directors on the board representing the poor depositors on whose saving the bank has come largely to this stage, in addition to three ex-officio directors from the government.

The government move to its takeover has therefore forced Dr Yunus to take a stand to ensure its functional continuity and save it from any structural change. And this is the fundamental cause why the global community has come forward to save the institution which has innovated micro credit as an effective tool of development for the non-bankable poor to provide them loans without collateral.

The government takeover will destroy its character and put the resources that the poor depositors have so far saved, to the hand of some new people who may run it as a commercial bank.

Thus two crises are now increasingly looming in the horizon as big threats to the government in one hand, and to the nation as a whole on the other with a weak government fighting on the home front to stabilise food supply and at the external front with a hostile global community.

Prime Minister Sheikh Hasina however, appears adamant on her move no matter what protest she is facing at home. The entire nation is now protesting the move. People have set up committees at different levels to protect the honour of Dr Yunus, they are holding rallies, human chain and marching on the street to dissuade the government from removing Yunus whom Grameen Bank needs so much.

People here wonder why the government is indifferent to global demand at a time when it spends millions of dollars to get publicity on small issues to build the country image and the image of the government.

But here the Prime Minister has so far paid little heed to a call for a compromise by the US secretary of State Hilary Clinton. The US ambassador to Dhaka James F Moriarty is routinely taking the case with the government saying Washington is highly disturbed and watching the development. He hinted it may hurt relations.

26 US Congressmen

Meanwhile, 26 US congressmen and six senators have urged the Prime minister in separate statements last week to find a satisfactory compromise with a guarantee for independence and functional effectiveness of the bank, way out from its government takeover.

European politicians, academics and British lawyers have also made similar pleas in recent weeks. Some of them have formed Friends of Grameen to raise global voice.

US assistant secretary of state for South Asia and Central Asia, Robert Blake made things further clear last week in a lengthy interview with the London-based Financial Times indicating, among other things, that relations may get hurt if the government does not change course. Blake is moreover scheduled to visit Dhaka this week to hold talks with the government and the opposition and civil society leaders on a wide range of issues and analysts here say there is no secret of the fact that the US government wants to an end to the problem.

Last week Nelson Mandela Foundation of South Africa in a letter to Prof. Yunus has also laid emphasis on the independence of the GB and urged the country’s leadership to find a solution to the issue.

Former French Prime Minister Ricardo and IMF managing director Micheal Camdasseau among five French high profile personalities made similar pleas last week asking satisfactory solution.

Brazilian author Paulo Coelho in an article said the issue is having the roots in ‘ignorance and greed.’ Civil society activists in Paris last week held a big rally at Eiffel Tower protesting the removal of Dr Yunus. Such protests are being regularly held now in New York, London and such other European capitals.

Analysts here say, these actions at global levels, in addition to protest by major opposition political parties and socio-cultural bodies at the home fronts are not only marginalizing the government as an effective tool of governance but also turning the country’s friends abroad to become hostile.

Bangladesh badly needs goodwill of the global community in its efforts to achieve economic growth and secure market access to developed nations like the EU or the US market. People here wonder why the Prime Minister is making the global community hostile at a time when Dhaka needs international support on all fronts. Especially when the country’s food crisis is on the rise with spiraling prices, US and European support is essential to mitigate the problems, they said.

The government is buying food grains at this moment from global market as part of a 2.2 million tonnes target including rice and wheat for the current fiscal 2010-11. It is buying now from East Asian market such as Vietnam at a huge cost. Time may also come soon when Dhaka may need more food grains support from the USA or the EU sources. So, unfriendly governments or persons having lost sympathy for Bangladesh government may prove crucial to address the situation.

Experience tells the slow shipment of food grains by the US government in 1974 had played a critical role in aggravating food crisis in the country; so it is better that the government handles the issue with far sight, analysts here say.

Written by Faisal Rahim

Link Requested by Chowdhury Sadaruddin | original source at http://www.bangladeshchronicle.net/index.php?option=com_content&view=article&id=137:rising-food-prices-yunus-issue-might-backfire-&catid=1:latest-news&Itemid=50

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