Muhith's statement on foreign investment and Dr Yunus

In a statement, the finance minister said there are different reasons for poor inflow of foreign investment though Bangladesh has a good position in the credit rating assessments by Moody and Standard and Poor's.
Bureaucratic tangles and corruption are hampering foreign investment, it said. Moreover, non-availability of energy, especially power shortage, was a barrier to growth of investment but it is now under the control of the government and generation capacity of electricity will reach to 9000-megawatt by 2015, he added.
He said it has already been decided that Bangladesh would be a transit country in the region, which would turn the area into a central point of economic activities. Taking it into consideration, Bangladesh is a most attractive area for investment, he added.
He said it must be remembered that investment, export and employment were seriously affected due to economic recession in 2008. But Bangladesh has been able to maintain more than 6 percent growth and rate of investment at 24- 25 percent, he added.
He said the negative position of Professor Yunus and publicity is contrary to Foreign Direct Investment (FDI) in Bangladesh and his publicity is not fully true. Professor Yunus has been expressing fears about the future of Grameen Bank over the last two years and carrying out publicity that the government wants to destroy this institution, the finance minister added.
There is no relation of this publicity with the reality and it is very much harmful for the country, he added.
"It is the personal remarks of the finance minister and he did not discuss it with any other. Amartya Sen did not make any comment about it. His comments were on rapid development of Bangladesh," the statement said.
"Understanding or without understating some of our media distorted it, mixing the two issues," he said.
The minister also said Prof Yunus believes that the Grameen Bank is his organisation and he will remain in the Bank by any means.
Prof Yunus has a strong publicity machinery and his international reputation has been playing a supportive role in favour of him, the statement said.
"Personally, I consider him as a friend and a respected person," said the finance minister.
Muhith said Amartya Sen is well-wisher of Bangladesh and he always highlights Bangladesh achievements internationally.
The finance minister said that Professor Yunus is respected person of the country and his contribution for poverty alleviation through expanding microcredit is highly appreciated.
"His sincerity and tireless efforts of 30 years has established Grameen Bank on a firm footing and the finance minister personally tried to expand it beyond the country. The finance minister played role to expand Grameen model in Malaysia, Indonesia and Nepal," it added.
As per the Grameen Bank rules, Professor Yunus cannot hold the managing director post after reaching normal retirement age of 60 years and these rules and regulations were formulated and published by Prof Yunus. Bangladesh Bank raised this issue when Grameen Bank board of directors elected him as MD for an unlimited period in 1999.
The Grameen Bank came under the spotlight 2010 when a Norwegian television documentary alleged that aid money was wrongly transferred to another part of the bank in the mid-1990s.
But the Bangladeshi government set up a review committee in January to look into the bank's affairs.
"I have suggested Professor Yunus that if he resigns willingly, an arrangement can be made for keeping him involved in Grameen Bank," it added. "Professor Yunus told me that if he resigns now, the whole of Grameen will collapse," the statement said. After leaving Grameen Bank Professor Yunus is often saying that the government is trying to grab Grameen Bank, which is not true.
The statement said Grameen Bank has expanded its activities massively in 2011 and savings of its members are on rise. Grameen Bank and BRAC have taken microcredit to a strong position and the government is determined to consolidate this position.
In the statement the finance minister said that the board of directors of the Grameen Bank formed a search committee to appoint a managing director of the Bank, but the job could not be done in the one and half years as the supporters of Prof Yunus demanded that Yunus should lead the committee.
The government did not consider the demand and tried to make the Yunus' supporters understand that they should change their mind to pave the way of appointing a managing director, which was urgently required to run the Bank effectively.
The government at one stage appointed the chairman of the Bank as the convener of the search committee and gave the committee full independence and authority to do its task.
"We hope, a managing director would be selected soon as per the proposal of the search committee," the statement said.
It said Prof Yunus initiated social business two decades ago, but it flourished in the past 10 years. Initially the social businesses used the resources and the goodwill of Grameen Bank though there was no stake of the Bank in the social businesses.
Even, Grameen Bank did not have any share in the Grameen Phone.
These social initiatives did not offer any dividend to any directors, instead used their earnings and profits for expansion.
But, these were not for the well-being of rural members, though the Grameen Kalyan often got assistance from different organisations of Yunus and works for the poor.
The statement said some questions had been raised about the network of social business, which vastly expanded by Prof Yunus. Already, some 20 such initiatives had lost their character as some of those turned into profitable organisations, some became losing concerns and some were closed. All of these organisations were established by using the goodwill of Grameen Bank. The Grameen Bank also appointed some directors for the social business, but their situation became very weak.
It said the government wants to resolve the crisis in the social business and formed a high powered commission to this effect, which also faced opposition from Yunus.
"In fact, Prof Yunus does not want to leave Grameen Bank at any cost. He wants that he will remain the managing director or the chairman of the Bank or only a person of his choice will get the position," the statement said.
It referred to the fact that Muhith in 1983 (when Muhith was the finance and planning minister) took the initiative to establish the Grameen Bank as a strong, sound and autonomous organisation.
In the statement, the finance minister said many microfinance institutions were born and died in the past hundred years, but Grameen Bank was established out of the phenomenon because it was he who offered Yunus the challenge of giving the Bank an institutional shape.
The statement said that the finance minister currently initiated the final process of giving the Grameen Bank a firm institutional base so it could sustain without depending on an individual. "This is the point where Prof Yunus differs with Finance Minister," it said.
It said the finance minister in the past three years were asked by many heads of states, intellectuals and civil society members whether the inflow of foreign direct investment was hindered because of the difference between the government and Prof Yunus on the Grameen Bank issue. The finance minister, responding the query, categorically said the inflow of soft loan and grant was not hindered, instead the flow of official development assistance increased substantially in the past three years.
In the statement, the finance minister hoped that the foreign direct investment would increase further in future because of the recent development in the financial sector, which was highly appreciated across the globe (like the recent report in the Economist).
He, however, stated that the government expenditure in Bangladesh was still only 18.5 percent of the total national income when the rate of investment was 25 percent.
"The government spending should be increased to 20 percent and the rate of investment to 32 percent for achieving the expected development," the statement said and added that the finance minister was confident that it would happen in the next two years.
-- BSS