What a wild ride 2024 has been for Mohammad Yunus. In June, he was indicted on charges of embezzlement, while on 1 January he was found guilty of labour law violations, for which he faced the prospect of six months in jail.
Now, he’s suddenly found himself in the country’s top job.
In the past 48 hours, the renowned economist and Nobel laureate was named the interim prime minister of Bangladesh, replacing his arch-nemesis Sheikh Hasina after her spectacular fall from grace this week.
Even in our current febrile global political climate, it is a dizzyingly fast turn-up for the books.
The 84-year-old, who pioneered microfinance as a way to help poor people gain economic agency, is returning to Bangladesh from Paris, where he has been recovering from surgery and working with the Olympics. Already sworn in by President Mohammed Shahabuddin, Yunus will act as caretaker premier until new elections are held.
Bangladesh is a country where there is no guarantee of stability and prosperity.
Hasina quit her role and fled the country on Monday after weeks of protests by students, angry over a quota system setting aside a large proportion of government jobs. The protests intensified into a broader challenge to her rule, described as increasingly authoritarian. At least 400 protesters were killed over recent weeks.
Yunus was the pick of student protesters, as well as military chiefs, business and civil society leaders.
“Be calm and get ready to build the country,” he said of his move in a statement.
Yunus wasn’t the first economist to tackle the issue of the needs of the poor, but his approach is perhaps the most successful and prominent, in large part because it revealed that the true work of economists is about recognising and responding to human behaviour, rather than simply being about numbers.
Born in 1940 into a large family, Yunus went on to study at Dhaka University and then gained his PhD from Vanderbilt in the United States. He worked as a professor, first in the United States and later in Dhaka, teaching economics. There, he witnessed first-hand the debilitating nature of poverty.
Describing poverty as the denial of human rights in his speech accepting the Nobel Peace Prize in 2006, Yunus drew a clear link between poverty and social turmoil. “The frustrations, hostility and anger generated by abject poverty cannot sustain peace in any society. For building stable peace we must find ways to provide opportunities for people to live decent lives,” he said.
“In 1974, I found it difficult to teach elegant theories of economics in the university classroom, in the backdrop of a terrible famine in Bangladesh. Suddenly, I felt the emptiness of those theories in the face of crushing hunger and poverty.”
Yunus had witnessed how small sums of money could make an outsized difference in the lives of poor people, and started lending small sums of his own money to village women to allow them to buy bamboo to use to make furniture, and later secured a bank loan to lend to the poor. Grameen Bank began in 1983 with thousands of members already benefiting from the projects.
Initially, the loans were intended to be split 50-50 between men and women. But Yunus quickly observed that the money was spent differently: men’s priorities were to spend the money outside the home, while women would maximise the return from the money, and keep reinvesting in new ventures, and spend the money on the family.
He has faced numerous legal cases, widely believed to be the result of a campaign of harassment as part of Hasina’s personal vendetta against him.
Yunus’ Grameen Bank began focusing primarily on women, who would launch small-scale businesses – such as renting out the village’s only mobile phone, or operating a small shop, or buying livestock. They would reliably pay back the loan, and often take out a larger loan to allow them to scale.
By 2022, a reported 9.5 million people had accessed Grameen funding, the vast majority of them women.
Founder of the Grameen Foundation Alex Counts described the approach as a “rare anti-poverty approach based on the strengths of poor people rather than their deficiencies”. Once Grameen Bank’s approach was deemed a success, many more microcredit operations, both public and private sector, started, with varying degrees of success. Grameen even set up a wing in the United States, under which 142,000 people received a cumulative $2 billion.
Bangladesh is a country where there is no guarantee of stability and prosperity. It came into being after a war to split from Pakistan in 1971, but statehood was hard-won, with up to three million lives lost in the war, around ten million displaced to India, and up to 30 million people internally displaced by the conflict.
The country is situated precariously, geographically, regularly battered by cyclones while simultaneously feeling the frontline impact of climate change and rising sea levels. At the same time, however, it is economically buoyant after decades of grinding poverty, with the poverty rate at around 13 per cent in 2021, down from 80 per cent in 1972. It is performing well on human development markers, such as almost universal enrolment in primary school.
Credit for at least a portion of this could well be attributed to Yunus. Still, Grameen has had its fair share of detractors, most notably in Esther Duflo and Abhijit Banerjee, the MIT economists who won the Nobel Prize in 2019. They ran randomised studies they say revealed little evidence to show that microcredit programs actually make a difference to people’s lives. Grameen has also faced criticism for high interest rates.
But perhaps more worrying for Yunus was that after his Nobel win, he suddenly attracted the evil eye from Hasina, who had previously been supportive.
Yunus made a brief foray into politics in 2007, announcing plans to start a political party, however abandoned them within a few months. In 2011, Hasina’s government announced a review of Grameen Bank activities, and Yunus was removed as its head.
Since then, he has faced numerous legal cases, widely believed to be the result of a campaign of harassment as part of Hasina’s personal vendetta against him. In fact, last year more than 170 influential world figures wrote an open letter to Hasina, calling on her to end the “continuous judicial harassment” of Yunus. Signatories included Barack Obama, Ban Ki-moon and several Nobel laureates. The letter said they were “deeply concerned with the threats to democracy and human rights” in Bangladesh.
It’s not clear what will happen to those cases now, with Hasina out of power. But even in his limited capacity as interim leader, Yunus has a difficult job ahead: to re-establish law and order, rebuild trust in the state, work effectively with the military, and ensure that elections are conducted in a free and fair manner.
At the age of 84, Yunus now finds himself responsible for an entire nation, rather than one element of economic reform.
