Is This the End for Muhammad Yunus?

In today's Bangladesh, even a Nobel Prize can't protect you from persecution.

The last hope for Muhammad Yunus, Bangladesh's Nobel Peace Prize winner and founder of the path breaking microcredit institution Grameen Bank, rests with a hearing in the appellate division of the Supreme Court of Bangladesh that on Tuesday was postponed for two weeks.

Last week, after three days of argument, a lower court, the High Court upheld the legality of an order given the previous week by the country's central bank that required him to leave his post of managing director because he was over 60 years of age. Yunus is now 70, and the High Court held that Grameen Bank's own staff regulations required employees to retire at 60, including him.

Yunus's own lawyers reject that interpretation of the law and hope now to persuade the appellate division that the High Court decision was "entirely perverse," "a total departure from all ordinary norms of practice," and "a total denial of justice," as they write in their appeal filing.

If the High Court decision stands, not only will Yunus be out of a job, it will also mean that at the time he received his Nobel prize in October 2006, he was illegally holding the position of managing director at the bank. Who knows what would be the legal status of decisions and agreements that Yunus made since 1990?

The charge that Yunus unlawfully stayed in his post is just one of the government's many allegations.

Last week, Sajeeb Wazed, the prime minister's son, who has also been appointed as her advisor, sent out an email setting out a series of allegations against the bank including  "fraud," "theft," "tax evasion," "draconian" methods of loan recovery and "embezzlement." He admitted that the source of these allegations -- which are forcefully denied by Grameen Bank -- are government legal papers.

The government and its supporters portray the government's action against Yunus as simply part of its commitment to "rule of law." 

The law is clear, they say: Yunus simply should not have been managing director of the bank since he turned 60. The government's current action is only directed at correcting that illegality, they claim. If he committed crimes he should be brought to account.

There is certainly some support for this position. As one High Court reporter told me, "Our sentiment is that Yunus's Nobel prize has nothing to do with his professional conduct and this prize does not give him any immunity from the music of law."

Nayeemul Islam Khan, the editor of the influential Bengali language newspaper Amader Shomoy argues that the government's action not only reflects a principled decision on the part of the government but should be applauded by the international community.

"By taking actions against the illegal activities/irregularities/unauthorized actions by Dr. Yunus and the Grameen Bank board, the government in fact is enhancing the image of the country by giving out the strong message that there is zero tolerance from [the] present government on corruption and irregularities," he wrote recently.

Others say the attack on Yunus is politically motivated.

There are few people more critical of microfinance's contribution towards alleviating poverty than Nurul Kabir, the editor of the English language newspaper New Age, and one might well have expected him to support the government in its attack on Grameen.

However in his view, the government's action against Yunus has nothing to do with principle or the rule of law -- it's a vendetta.

"Hundreds of Awami League party men are committing innumerable illegal actions across the country with absolute impunity from the government," he says, referring to the ruling party of Prime Minister Sheikh Hasina. "The first thing that the government did after coming into government was to withdraw corruption charges against the ruling party leaders. So, we have no reason to believe that the government is serious about fighting allegations of corruption."

Those who share Kabir's view point to two key events to explain the government's move against Yunus.

Since 1997, when, during her first term, Hasina signed the Chittagong Hill Tracts peace treaty bringing an end to a decade-long internal military conflict, the prime minister thought that she should get the prize. She even sent senior foreign office officials around the world in search of nominations. Hasina is therefore said to have been none too pleased that Yunus received all the international acclaim.

This may not have mattered much, were it not that six months after wining the award, in March 2007, Yunus announced that that he would set up a new political party, called Nagorik Shakti (Citizens Power). He wanted, he said at the time, a "complete emasculation of the established political parties" in order to "cleanse the polity of massive corruption."

It happened during a controversial two-year period when the country was in a state of emergency, with the interim government, supported by the army, advocating a new kind of politics without the leaders of the two main political parties.

Though it was a short-lived effort on Yunus's part, some claim that Hasina saw his intervention as a direct personal attack on her and the Awami League. "She thought that he was involved with the army in trying to remove her and [opposition party leader] Khaleda Zia from politics. That the army's plan to remove her was also his plan," a former bureaucrat said.

Now, however, all eyes will be on Yunus's appeal -- which looks to many like a foregone conclusion. In the two years that the current Awami League government has been in power, the government has yet to lose an important political case in the courts. Though the independence of the judiciary is enshrined in Bangladesh's constitution, governments of all types may have significant leverage over judges -- particularly if they require confirmation of their permanent judicial status, want promotion to the appellate division, or are seeking appointment as chief justice. Lawyers here commonly talk about this leverage being used on occasion -- though there is no direct evidence.

So unless the appellate division looks kindly on Yunus's legal arguments, and more significantly feels able to take a position that will set them in opposition to the government, Grameen Bank will soon be looking for a new managing director.



Reset 2.0

Vice President Joe Biden's speech in Moscow was notable for what it didn't do -- namely, ruffle any feathers in the burgeoning relationship between the United States and Russia.

MOSCOW — You can't really blame U.S. Vice President Joe Biden. It was the end of a long visit to Moscow. For two days, he flitted from meetings to receptions to meetings; he had to see to the happiness of his wife and granddaughter Finnegan, whom he had brought along; and, on top of it all, he had a cold. He was tired. By the time he delivered a major policy speech at Moscow State University on March 10 laying out the Obama administration's vision of the reset's next phase, he seemed barely there. And by the time he got around to getting tough with the Russians and invoking the case of imprisoned oil tycoon Mikhail Khodorkovsky, Biden froze. "Over the past few months, our administration has spoken out against allegations of misconduct," he began, "in the trial of, uh, uh, uh, the uh, excuse me, uh, Kamero ... Kerminsky!" he sputtered. And then, by way of apology: "You can tell I didn't do very well in Russian."

The linguistic flops aside -- Biden said he had brought Finnegan to see the home of the Russian cultural giants, all of whose names proved impossible -- the speech was a greatest-hits compilation of everything Barack Obama's administration has done and has wanted to do, has said publicly and has said privately, vis-à-vis Russia. New START? Check. Shipments of supplies to Afghanistan via Russia? Check. Cooperation on Iran? Check. Fostering an atmosphere of increased trust, starting to build economic ties, gently pressing Russia on rule of law and human rights issues? Ditto. Since last summer, and especially since New START treaty was ratified by the United States in December, the two countries have been working on the economic side of the relationship, with Washington quietly pushing Moscow on rule-of-law issues. Biden's speech, though, marked a more high-profile appraisal of the reset and in some ways a road map as to where it is headed next. "This reflects what we've been talking about since the beginning of the reset," said a source involved in the trip's preparations. "The only change is that we're now building the next phase."

The next phase is a two-pronged approach, using the trusted carrot and stick. "The next frontier in our relationship," Biden said, "will be building stronger ties in trade and commerce that match the security accomplishments of the last two years." In other words, this means Russia's long-overdue accession to the World Trade Organization and the equally overdue repeal of the Jackson-Vanik amendment, a 1974 law built to punish the Soviet Union for not allowing Jews to emigrate but which now prevents Russia from having normal trade relations with the United States.

In turn, that should mean a wave of American investment in Russia, like PepsiCo's recent purchase, for $4 billion, of Wimm-Bill-Dann, Russia's largest juice and dairy conglomerate. (In Biden's mind, though, this was more a fruit of Obama's political capital: "Imagine, five years ago, the likelihood that an American company could buy the largest anything in Russia.") There have also been recent big-money deals involving ExxonMobil, Chevron, John Deere, Microsoft, and Alcoa. And on March 9, with Biden and Russian First Deputy Prime Minister Igor Shuvalov watching, the Russian airline Aeroflot signed a deal buying $2 billion worth of Boeing planes, at a 20 percent discount. (Likewise, there have also been significant investments in the United States by Russian companies like Evraz, a steel company, and Lukoil.) But, as Biden pointed out, Russia was America's 37th-largest export market last year. "We've got to do better," he said. "We've got to do better."

Then came the stick. "But you in this room know as well as anyone that even if liberalizing our trade relationship, Russia's business and legal climate are frankly going to have to improve," Biden said to an auditorium full of business people. "Because right now, for many companies, it presents a fundamental obstacle." Then he quoted President Dmitry Medvedev's description of Russia's problem of "legal nihilism" and used a maneuver he often resorted to in the speech: "Not my quote," Biden said. "His quote." (Message: I'm not Bush; I'm not lecturing.)

Biden went on to mention lawyer Sergei Magnitsky, who died in jail in 2009 after exposing a scheme used by three Interior Ministry officials to defraud the Russian treasury of $230 million, and invoked poor, garbled Khodorkovsky. (The latter, the vice president said, was imprisoned "on a political whim.") Biden's point, and one Russia watchers have been making for years, is that you can't simply will investors to Russia. "No amount of government cheerleading, or public relations, or U.S. support, or rebranding will bring wronged or nervous investors back to a market they perceive to have these shortcomings," he said. "I'm not here to lecture; I'm not here to preach; and I'm not here to tell Russia what to do," he added, but if Russia wanted foreign investors to come back there was only one thing it could do: "Get your system right."

The vice president's team was at pains to portray the speech as nothing out of the ordinary, as one that simply advanced the reset agenda. "We now have a record of achievement on security," said a senior administration official. "This trip was about one piece of the reset that's underdeveloped, and that is trade and economic ties. What the vice president said in his speech are messages we've been consistently sending, through White House statements on Magnitsky and Khodorkovsky; we've had half a dozen statements on Strategy 31 [the movement that protests on the 31st of every 31-day month for freedom of assembly]. In our opinion, we've had a consistent message."

But to everyone who heard it -- and to the people who interrupted Biden's speech to applaud -- it was new, because a White House statement that barely registers on a news wire is not the same thing as a vice presidential policy speech, delivered in Moscow. It was also unusual for another reason, as the Obama administration has so far been reluctant to take this tone, at least publicly. Although there have been discussions behind the scenes about the Khodorkovsky case and official boilerplate statements, policy speeches, like Obama's in Moscow in July 2009, usually limit themselves to abstract "universal values" or focus instead on strategic cooperation, like New START and Iran.

The stranger thing, though, was the fallout from the speech. Namely, there wasn't any. There was some bluster from the corners that are expected to bluster, like Duma deputy and foreign-policy hawk Sergei Markov. "From what I understand, the subtext of Biden's speech was 'Basically, I have to follow Obama's orders, but basically I hate Russia and I hope that the reset blows up,'" he said, adding that he has yet to see any tangible benefits for Russia from the reset.

In general, though, Biden's speech passed like the life-advice talk your well-meaning uncle gives you on the sidelines of a family dinner. It's nice and maybe a little annoying, but it's nothing you haven't heard before and you'd rather just go back to drinking with your cousins.

Russian media ignored it, just as Biden largely ignored Prime Minister Vladimir Putin's out-of-left-field suggestion, at their meeting earlier that day, to just drop visa requirements between Russia and the United States. (Biden, a bit taken aback, was reported to have said it was a "good idea" and promised to think it over.) But his speech, in itself, is a massive sign of progress. A similar speech by someone from George W. Bush's administration -- or, God forbid, former Vice President Dick Cheney himself -- would have triggered a vicious rhetorical war. But Biden's critique was calmly received, due in equal parts to the tactful phrasing, the two years of public deference to Russia, and perhaps the uncertainty about who will be leading the two countries after 2012. It's also a signal of a deepening familiarity between Russia and the United States, notes Fyodor Lukyanov, the well-connected editor of Russia in Global Affairs. "This is the Chinese method," he explained. "Obama said all kinds of things in China, and China didn't react. There was no publicity, no change in Chinese policy. Now, in Russia, there's an understanding that the Americans have to say it, that's their style. Fine. They want to talk? Let them talk."

As for the commercial ties, Lukyanov is equally skeptical. "America and Russia will never be major economic partners; it will all stay in Europe," he said. And in Europe, talk is very different. "The Europeans have to say this stuff about human rights and democracy in public," Lukyanov explains. "But in private, it's only about business."