VZCZCXRO8207
OO RUEHCI
DE RUEHKA #0583/01 1530940
ZNY CCCCC ZZH
O 010940Z JUN 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6825
INFO RUEHLM/AMEMBASSY COLOMBO 8464
RUEHIL/AMEMBASSY ISLAMABAD 2193
RUEHKT/AMEMBASSY KATHMANDU 9698
RUEHNE/AMEMBASSY NEW DELHI 0665
RUEHCI/AMCONSUL KOLKATA 1312
RHHMUNA/USCINCPAC HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 000583 
 
SIPDIS 
 
DEPT FOR SCA/PB 
 
E.O. 12958: DECL: 05/29/2018 
TAGS: PGOV EAID ECON PINR BG
SUBJECT: NOBEL LAUREATE'S GRAMEEN BANK THRIVING UNDER 
CARETAKER GOVERNMENT; CONCERNED ABOUT FUTURE 
 
Classified By: Ambassador James F. Moriarty.  Reasons 1.4 (b) and (d) 
 
 Summary 
======= 
 
¶1. (C)  According to its founder, Nobel Laureate Muhammad 
Yunus, Grameen Bank is thriving under the Caretaker 
Government and has been largely immune to the effects of high 
food prices and natural disasters that have plagued 
Bangladesh's economy this year.  Grameen continues to expand 
into new markets and businesses, including opening its first 
branch in the U.S. and moving into the health care sector in 
Bangladesh.   What Grameen and its founder fear most is a 
return to the confrontational politics and the culture of 
impunity that existed before the state of emergency.  While 
many have called for Dr. Yunus to play a political role, and 
while he has flirted with this in the past, the Grameen head 
fears that politicization would threaten all that the Bank 
has achieved.  Yunus sees decentralization as key to 
improving governance and service delivery and unlocking 
Bangladesh's potential. 
 
Grameen Bank Thrives Under CTG 
============================== 
 
¶2. (C) The Ambassador met with Nobel Laureate Dr. Muhammad 
Yunus at his modest office in the Grameen Bank Headquarters 
building in Mirpur, Dhaka.  Pol/Econ Counselor (notetaker) 
accompanied the Ambassador during the one-hour long meeting. 
The meeting was followed by a brief presentation on the 
launch of Grameen America's first branch in Queens, N.Y. 
Yunus told the Ambassador that Grameen America has plans to 
expand in the U.S., beginning in New Orleans, once the proof 
of concept period in New York is completed. 
 
¶3. (C) Yunus said that Grameen Bank's status in Bangladesh 
was currently very healthy, with 7.45 million borrowers, 97 
percent of whom are women.  Grameen Bank had 2,499 branches 
and 25,211 staff members, and was totally owned and operated 
by its members.  Grameen has been largely unaffected by the 
natural disasters and high food prices that have plagued the 
economy this year.  Over the years, Grameen had expanded into 
a family of 25 companies, including agriculture, 
communications, education, energy, telecom, and IT. 
 
Grameen Expands into Health Care Sector 
======================================= 
 
¶4. (C) Yunus became animated as he described Grameen's 
expansion into the health care sector.  Grameen Health Care 
Services was intended to address the problem of lack of 
qualified medical personnel at the local level.  Yunus 
envisioned an integrated health care delivery service, funded 
through health insurance contributions by members, that would 
include local health clinics, 50 bed hospitals at the 
district level, and a national "Medical City" which would 
provide more advanced care and also oversee education and 
training of doctors and nurses, both for employment within 
the system and opportunities abroad.  Yunus said the biggest 
challenge that the health sector currently faced was 
competition from the GOB for hiring doctors, who were 
attracted by the perks and the low expectations of the 
government health care system.  Yunus will soon travel to the 
U.S. and meet representatives from Massachusetts General 
Hospital and the Mayo Clinic to discuss possible 
partnerships. 
 
The Problem with Politicians 
============================ 
 
¶5. (C) Yunus claimed Bangladesh's greatest resource was its 
people, and noted that much of the country's success had been 
achieved in spite of the Government.  He said the biggest 
problem facing the country was the dysfunctional political 
system.   Yunus told the Ambassador he had been offered the 
position of Chief Adviser of the current caretaker government 
but had turned it down. Still, he was full of praise for what 
his friend Dr. Fakhruddin Ahmed's government had 
accomplished.   Yunus said the CTG had achieved more in two 
years than a political government would have achieved in 50 
years. 
 
¶6. (C) Yunus said he feared the return of an unreconstructed 
political class following elections.  He recounted the 
 
DHAKA 00000583  002 OF 002 
 
 
difficulties that previous political governments and 
bureaucrats had caused for Grameen and other NGOs.   Yunus 
blamed the senior leaders of the parties for the rampant 
corruption in Bangladesh, saying they had created an 
environment in which corruption could flourish with impunity. 
Countering the conventional wisdom, Yunus praised the CTG for 
its handling of this year's food crisis, noting the 
government had done much better than a political government 
would have. 
 
Importance of Decentralization 
============================== 
 
¶7. (C) Yunus was dismissive of the Dhaka-based intellectuals 
critical of the CTG.  Grameen was in touch with the people, 
he reported, and did not see any signs of famine or severe 
distress.  Yunus championed decentralization, noting he had 
argued in favor of strong local government with former Prime 
Ministers Sheikh Hasina and Begum Zia.  Yunus claimed he had 
been one of the early proponents of village government "Gram 
Sarker," adding he was disappointed to see that abolished. 
Yunus considered it imperative that the Upazila system be 
retained and that elections be held.   In addition, he saw no 
role for Members of Parliament in overseeing local 
administration. 
 
Grameen Out of Politics 
======================= 
 
¶8. (C) Yunus confided to the Ambassador his reluctance to see 
Grameen take a stand on political issues for fear it would 
result in the destruction of all that he had built.  Once 
politicized, Grameen would become a target for the political 
classes, who would seek to provoke divisions within the 
organization.  Yunus did not directly address the frequent 
rumors that he was being considered as a consensus President 
or Prime Minister.  We have heard from others in recent days 
that Yunus has been talking with the Government and its 
supporters about a possible future role. 
 
Comment 
======= 
 
¶9. (C)  Yunus comes across as very sincere and committed to 
the work of Grameen.  He bears the scars of many 
confrontations and disappointments with Government, both 
politicians and bureaucrats, and this seems to color his 
perceptions of the political parties and the two former prime 
ministers.  It is understandable why he would be a proponent 
of strong local government, and his analysis of the 
impediments to economic growth appears on the mark.  While 
Yunus was clear that Grameen should stay out of politics, and 
while it would be hard to see him as a politician, he did not 
close the door to some future "political" role. 
Moriarty