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Nobel Laureate Muhammed Yunus, founder of microcredit organization Grameen Bank, lost an appeal to regain his position as the Bank’s managing director today in a petition hearing in front of Bangladesh’s High Court. Yunus was dismissed from his position last week, based on assertions that he was improperly appointed and is significantly older than Bangladesh’s mandatory retirement age of 60. Yunus, who had been managing director of Grameen Bank since 1999, is 70 years old.
“Prof Yunus has been continuing in his job with no legal basis, therefore his petition has been rejected,” ruled High Court judge Muhammad Mamtaj Uddin Ahmed.
Grameen Bank is a microcredit organization that strives to fight poverty via small loans to impoverished Bangladeshi populations. By the end of 2009, the bank had made over $8.7 billion dollars worth of microloans. In 2006, Yunus and Grameen Bank were awarded the Nobel Peace Prize; the Nobel Committee awarded half of the prize to Yunus and half to the bank. Grameen Bank is the only corporation to have ever won a Nobel Prize in any field.
In the Nobel Committee’s announcement, they described Yunus’ leadership and vision at Grameen:
“Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty. Grameen Bank has been a source of ideas and models for the many institutions in the field of micro-credit that have sprung up around the world.”
Now, however, Grameen and Yunus find themselves in a legal struggle, which Yunus plans to take to the Supreme Court. Last year, Bangladesh’s Prime Minister, Sheikh Hasina, said that Yunus and Grameen Bank were “sucking blood from the poor.” Many speculate that the harsh words – and now action – stem from Yunus’ attempts to form a rival political party in 2007.
Yunus’ case is notable in part because of the elite support group he has amassed during his struggle to regain his position. His allies, who are calling their ad hoc organization Friends of Grameen, include former Irish President Mary Robinson and former World Bank President James Wolfensohn.
“Because of the importance of such a role model, our duty is to protect the integrity of Professor Yunus and the independence of Grameen Bank,” said Robinson.
Wolfensohn sat down with Steve Forbes earlier this year as part of theIntelligent Investing with Steve Forbes video series. The two spoke about Wolfensohn’s own involvement in international development. Although it doesn’t pursue microcredit, the World Bank is engaged in a mission similar to that of Grameen Bank.
Wolfensohn told Forbes that he felt it was essential that development projects, “not be run by bureaucrats from the World Bank or the United Nations, but that they be run by locals, and that you reward the locals that are doing the best work.”
“If they’re not doing good work,” said Wolfensohn, “you withdraw the money.”
“Moving it to the fields and having them take responsibility, and really monitoring that, was something that I think was working pretty well,” he said.
In a May 2008 issue of USA Today (reposted here, as the original is unavailable), Alan Webber recounted a conversation between Yunus and Wolfensohn:
“I understand you intend to lift 100 million people out of poverty,” Wolfensohn said.
“That’s right,” Yunus told him.
“Don’t you think that’s a little overly ambitious?” asked Wolfensohn.
“No,” said Yunus. “We’ve looked at the numbers and we think we can do it. But,” Yunus went on, “if you think it’s too ambitious, what do you think is a better number?”
When Wolfensohn didn’t answer, Yunus offered a number.
Wolfensohn shook his head. Too low.
“20 million?” Yunus offered.
From Wolfensohn’s reaction it was clear that number was still too low.
“How about 50 million?” Yunus asked.
Wolfensohn seemed pleased by that number.
“That sounds about right, ” he said.
“OK,” Yunus told him, “you do 50 million and I’ll do 100 million.”
Following today’s ruling, Yunus may have to look elsewhere for opportunities to help impoverished populations. Although his lawyers have announced plans to take the case to Bangladesh’s Supreme Court, the High Court’s swift decision makes it seem unlikely that the ruling will be overturned.
“This is a sad day for Bangladesh,” said Sara Hossain, a lawyer for Yunus.