Indian economist pokes holes in Grameen myth

By this time, if you're not convinced that Muhammad Yunus is a saint on the order of Mother Theresa and Bill Gates (the new one! the new one!) rolled into a big, cuddly ball, you haven't been reading the papers. But even as the rest of the world organizes webinars and virtual sit-ins and e-petitions and so forth to try to get Bangladeshi Prime Minister Sheikh Hasina to drop her campaign to discredit the supposed father of microfinance (and founder of Grameen Bank), Columbia economist Jagdish Bhagwati suddenly weighs in out of nowhere to expose the "real truth," via the unlikely vehicle of the Times of India.

Have a read for all the dope, but here's a highlight or two:

"…many of those now discounting Sheikh Hasina's credentials are guilty of inflating those of Yunus. Consider the frequent refrain that Yunus is the "pioneer" of the microfinance movement. In fact, the true pioneer of microfinance is a remarkable woman from Ahmedabad , Ela Bhatt, a follower of Gandhi who established SEWA (Self-Employed Women's Association ) as a bank in April 1974, two years before Yunus founded his Grameen Bank Project in Jobra, Bangladesh.

Throughout its existence, SEWA has been regulated by the Reserve Bank of India, staying strictly within the law and seeking no special dispensations. Unlike the Grameen Bank, it has received no foreign money (such as the grant of $100 million from Norway, the handling of which led to the initial charges of malfeasance against Yunus), and it has distributed dividends of 9-12 % annually each year since its founding. Yunus is suspected of covering up losses at Grameen with huge sums of money from abroad, whereas SEWA has demonstrated that poor, self-employed women can own and run a financial body in a self-sustained fashion without external largesse.

Third, many Bangladeshis, jealous of the independence they secured in the crucible of the Pakistani army's genocide in East Pakistan 40 years ago, resent the vast influx of foreign money , which has turned Grameen and Yunus almost into a rival to the democratically elected government, a phenomenon that no government would tolerate. Indeed, Clinton's intervention in the feud between Yunus and Sheikh Hasina highlights the danger of foreign influence in Bangladesh's internal affairs."

I'm not sure whether Hasina or Bhagwati either one has met the burden of proof on these arguments. But it's interesting to see Bhagwati staking his credentials on the supposed tyrant, whom all the international love for Yunus has now made look more and more like an underdog.