Nobel winning economist Muhammad Yunus was facing jail. Now he’s running Bangladesh

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A week ago, Bangladeshi economist Muhammad Yunus appeared destined for a jail cell. On Wednesday, the Nobel Peace Prize winner was instead sworn in as interim leader of his south Asian nation.

As far as reversals in politics go, there have been few as dramatic.

Bangladesh, the world’s second-largest exporter of clothes after China, has been gripped by political turmoil this summer, as student-led mass protests that began in early July intensified to a point beyond the control of law enforcers.

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The target of the students’ ire, Sheikh Hasina, who had led Bangladesh with an iron fist for the past 15 years, was forced to flee the country over the past weekend. In the end, her security team reportedly gave her just 45 minutes to escape to India, as angry protesters marched towards her residence.

The protest’s initial goal was to reform the country’s job quota system — a structure in which Bangladesh reserves a portion of government jobs for people belonging to certain groups, including the descendants of freedom fighters from the 1971 war of independence against Pakistan. But that quickly escalated into a demand to change the government, after clashes left more than 250 people dead — many of them protesters — including nearly 100 in a single day.

Some of the videos of the killings posted on social media were quite gruesome, compelling more people to take to the streets. An unarmed protester named Abu Sayed, for instance, was shot multiple times by the police — an agency completely under the control of the government — as he stood a few metres away from them with his arms wide open.

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Another video showed how law enforcement firing on protesters hanging on the edge of a building trying to escape the police. The total death toll also included some law enforcers and the general public who weren’t necessarily part of the protests.

An aggressive leader by nature, Hasina never really tried to calm the protests until the very end. On the contrary, she called protesters traitors on live television, later claiming she had been misunderstood. Analysts say she misjudged the gravity of the situation and assumed that her enforcers, as in the past, could manage the protests.

Her aggression was also evident in her attacks against 84-year-old Yunus, the country’s only Nobel-prize winner and arguably the most widely known Bangladeshi in the world. A pioneer of microfinance, Yunus became a global phenomenon in 2006 when he was awarded the prize.

But in recent years, more than 100 cases were filed against him, all of which were politically motivated, according to Yunus and his legal team.

“I have been called a bloodsucker (of the poor), a bribe taker, the country’s enemy,” Yunus said in a press conference outside a Dhaka court on June 12. “Every year, (the government) builds up new stories against me. They have been harassing me for a very long time.”

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In a similar setting on June 2, an emotional Yunus said that he had to stand inside an iron cage at court for the first time even though he wasn’t deemed guilty yet and told reporters that he was leading a “cursed” life.

Analysts say that Hasina feared Yunus as a potential political rival. She also blamed him for the World Bank’s decision to not provide the country with a loan to build a major bridge in Bangladesh. She claims that Yunus, with the help of his “friend” Hillary Clinton, compelled the World Bank to pull out and raising concerns about corruption. Eventually, Bangladesh built the bridge with its own funds.

Yunus denied the allegations on multiple occasions. “What can I say about this … this is laughable,” he told Deutsche Welle in an interview earlier this year. “She won’t get peace until she plunges me in the Padma River (which the now-built bridge crosses).”

The 84-year-old’s popularity stems from his work in microfinance, a movement he started in the late 1970s. His organization, Grameen Bank, offered loans worth around US$100 to Bangladeshi women to help them escape poverty. The concept led to him winning the Nobel and the practice spread to several other nations including the United States.

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Despite his success, the concept of microfinance came in for criticism, with many alleging that lenders charged very high interest rates from the poor. Yunus said that these organizations had moved away from the original concept and were focusing more on their profits rather than the poor. A 2010 documentary also alleged that Grameen Bank was dodging taxes.

Overall though, he remains a popular figure abroad despite running afoul of Hasina’s government. In January, more than 100 Nobel laureates and global leaders including Barack Obama in a letter urged her to stop the “judicial harassment” against Yunus.

For the students, Yunus was a logical and perhaps the only choice to lead an interim government due to his apolitical stance, his background as an economist and his popularity both in and outside Bangladesh.

While his first goal will be to ensure the return of law and order after the police largely abstained from their duties following Hasina’s sudden departure, leading to widescale lootings and attacks on minority communities, he’ll also need to work on getting Bangladesh’s economy back on track.

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While Hasina curbed other political parties and the media through multiple arrests, legal cases and threats over the last 15 years, the economy did grow at a consistent rate. Bangladesh has, like other countries, also felt the bite of inflation.

The recent protests have seemed to worsen the situation as S&P Global downgraded the nation’s long-term sovereign rating from BB- to B+ on July 30.

Saad Hammadi, a fellow at the Balsillie School of International Affairs in Waterloo, Ont., said the interim government will face “many challenges.”

Yunus will be expected to “deliver justice, create a functional economy and democracy and establish rule of law and a transparent and accountable government,” Hammadi said.

He also noted that Bangladesh’s foreign reserves have fallen to under US$20 billion from US$40 billion in June 2022 due to a drop in export revenues and falling remittances.

In Bangladesh’s garment industry, which has already made the country the second-largest exporter of clothes in the world, serving companies such as H & M Hennes & Mauritz AB, Zara and Lululemon Athletica Inc., there are hopes that Yunus can unlock growth.

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Miran Ali, who is a member of Bangladesh’s largest garment manufacturing association and runs Misami Garments Ltd. said that he hopes Yunus can relieve the industry from corrupt officials who make it “almost impossible” to run his business. He also hopes Yunus’s popularity will help further spread the Bangladesh garment industry’s reach globally.

“We have a leader who is well-known and welcome across the world,” said Ali. “It’s like having Nelson Mandela as your president.”
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