Employees of Grameen Bank form a human chain in front
of their central office after a court upheld an order removing Nobel laurate
Muhammad Yunus as head of the microlending bank he founded, in Dhaka March 8,
2011.
Increasing state control
over Grameen Bank will hardly serve the interests of Bangladesh.
Bangladesh today is a global poster child within the Muslim world for women’s
development. When it comes to gender equality, it ranks above all South Asian
countries and Muslim-majority nations in Asia. The Bangladesh gender paradox –
superior status of women despite a patriarchal social structure and strong
influence of religion – owes to another paradox: Health conditions and economic
participation of women have improved over the last twenty years despite limited
public investment in social sectors.
At a time
when women’s development has been lacking in much of Africa and South Asia,
millions of Bangladeshi women are going to work every day as factory workers,
primary school teachers, and healthcare providers. This has happened not because
of any large scale public investment project. When the boom in women’s
participation in export oriented factories started in the mid 1990s, most girls
in Bangladesh were barely completing primary school.
Rather,
the foundation for women’s development was
laid by non-state actors. Bangladesh’s microfinance pioneer
Professor Muhammad Yunus saw women as the key agent of social change nearly
four decades ago when gender development was yet to be recognized in the
country’s development agenda. In later years, NGOs like Grameen Bank and BRAC
not only championed development schemes that targeted women, they also employed
hundreds of thousands of women at the community levels to deliver health,
family planning and education services.
Bangladeshi
NGOs have further promoted the status of women by increasing their
participation within the organization. While seven out of 20 directors
at BRAC are women, Grameen Bank has gone one step forward by employing female borrowers as members of its
governing board. In later years, the government built on these
transformative measures by adopting a gender sensitive budget and further
promoting women in leadership positions in the public sector.
However
this unique collaboration between the state and NGOs for women’s development is
now under threat. In 2011,
Yunus was forced to step down as
managing director of the bank on the ground that he was older than the
mandatory retirement age of 60. That was followed by a number of attempts to
bring Grameen Bank under the state control. Last week the Bangladesh government
amended the rules to give itself the authority to appoint board
members for Grameen Bank. Many see this as a blatant attempt to strengthen government control over and
eventually nationalize the bank.
Previously,
its more than 8 million rural female borrowers would directly select board
members of Grameen Bank through open election among themselves. That power to
appoint its own board members has now been taken away from Grameen Bank’s
female members, who own a majority of the Bank’s shares, and given to the
central bank. Following the new government directive, elections will be
overseen by officials from another bank. The government will form a
three-member committee to elect nine members of the 12-member board. According
to Bangladesh’s largest newspaper the Daily Star, the three-member body
will comprise of two deputy managing directors, one from a state-owned
commercial bank and another from Palli Karma-Sahayak Foundation.
The
evidence on whether microfinance reduces poverty
has been contentious. A number of recent studies
based on randomized control trials – today considered the gold standard for the
evaluation of development programs – find no sign that access to microfinance
improves household consumption in India, Morocco, Mongolia, Thailand and the
Philippines. But the same studies demonstrate that microcredit, if reasonably
priced, can lead to business creation and expansion. Moreover, in the case of
Bangladesh, a large-scale, long-term study by
World Bank researchers published earlier this year shows a positive
impact on personal expenditures, household assets, and children’s education. Recent research on Bangladesh’s social
achievements also conjectures that without the platform created by
NGOs, women’s development in Bangladesh would have been unlikely given the
restrictive social setting and limited public spending on social outcomes.
Women’s
participation in NGO programs in Bangladesh, including initiatives in health,
education, savings and microcredit, remains strikingly high even today. In a nationwide survey of 8,000
households conducted earlier this year, we found that almost 12
percent of rural women between the ages of 20-39 had joined a new NGO program,
predominantly in microcredit, since last year alone.
The
Bangladesh paradox, or strides in gender equality in a cultural context that is
seen as hostile to women, can be linked to the presence of a vibrant NGO
sector that has ensured that poverty and patriarchy will not stand in the way
of expanding women’s agency in the country. Beyond teaching women how to save
and get access to credit, the NGO-driven microcredit program created a sense of
solidarity and improved outside mobility as borrowers formed credit groups and
met each other on a regular basis. This helped deliver other important social
services such as family planning, and maternal and child health care. Most
importantly these actions have facilitated significant changes in norms,
attitudes, and practices related to gender equality.
Bangladesh
has improved its rank in this
year’s Global Gender Gap report, moving from 75 (2013) to 68 (2014). Much of
this is owed to the inclusive model of social development that has seen NGOs
working side by side with the state for four decades. This has facilitated
social innovations in the field of women’s empowerment and gender
development. NGOs like Grameen are invaluable in environments where
conventional solutions to gender issues (such as poverty reduction and economic
growth) alone have failed to deliver. Further progress is possible if the
government-NGO partnership is nurtured and left outside politics. On the other
hand, the country gains nothing if state control over Grameen
Bank is strengthened. It would at best marginalize millions
of female borrowers who have quietly fought for gender equality
in this economically poor Muslim majority nation.
Niaz Asadullah is Professor of Development
Economics and Deputy Director of the Centre for Poverty and Development Studies
(CPDS) at the University of Malaya. Zaki Wahhaj is Senior Lecturer in Economics
at the University of Kent.
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