Bangladesh’s Yunus walks reform tightrope in eye of trade, domestic storms

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TOKYO — At 84, micro-lending guru Prof. Muhamad Yunus has accumulated international tributes and media accolades galore, from the Nobel Peace Prize for his work promoting grassroots community development to U.S. late-night talk show appearances — and even a cameo on “The Simpsons.”

In his latest guise as interim leader of Bangladesh since last August, however, he has garnered fierce criticism over his stewardship, which is spilling over into street protests. The task facing Yunus, a political independent, is to steer his country from the ruins of the regime of former leader Sheikh Hasina to new elections. Hasina fled to India after a wave of deadly student-led demonstrations and corruption allegations.

Still, speaking to Nikkei Asia in Tokyo after delivering a keynote address at Nikkei’s annual Future of Asia conference, Yunus cut a relaxed figure. In his traditional outfit of handloom kurta and vest, he smiled as he explained the patience needed to meet the challenges facing Bangladesh, like implementing much-needed reforms in the face of adherence to the status quo while rival political factions call for elections before the end of the year, as well as negotiating delicate relationships with India and China.

“Any rebuilding is a difficult process, even a simple one becomes difficult because you are shaking things up,” Yunus told Nikkei Asia in an interview on the sidelines of the conference. “People get used to the status quo. Whatever it is you want to change, people resist.”

Yunus faces a tower of post-Hasina tasks, including guiding the country to electoral reform and a review of the country’s constitution and judicial system. “We are pushing our program … how to redesign this institution (the state). It’s not just a restoration.”

altMuhammad Yunus delivers a keynote speech during Nikkei’s Future of Asia conference in Tokyo on May 29. (Photo by Tomoki Mera)

Yunus maintains his position that electoral reform must be implemented before proceeding to the next general election. He previously indicated plans to hold polls by mid-2026, while Bangladesh’s army chief, Gen. Waker-Uz-Zaman, in May stirred up expectations by calling for voting to be held in December this year.

In the latest ratcheting up of domestic pressure, elementary schoolteachers joined others taking to the streets to demand better wages in the days before Yunus’ trip to Tokyo. Speculation about his future ran rife late last month after reports spread that Yunus had told a student leader he might step down if parties could not agree on reforms and an election timeline.

altGarment workers take to the streets to press wage claims after police bar them from marching toward the chief adviser’s residence in Dhaka on May 20.   © Getty Images

Asked to respond to those reports, Yunus answered bluntly, “I have not answered that question in Bangladesh. Since I didn’t say it in Bangladesh, if I say it in Japan, that will create a lot of trouble for me,” he said.

Born the son of a prominent gold jeweler in Bengal, and one of nine siblings, Yunus built an internationally lauded career as an economist and founder of community development lender Grameen Bank. For all that, he is no stranger to dealing with adverse domestic pressures and political enemies.

He was dismissed from leadership of Grameen Bank in 2011 amid investigations into its finances, and acquitted in alleged graft and labor law violation cases last year after his relationship with Sheikh Hasina soured following his declaration of intent to seek public office in 2007.

While the appointment of Yunus as interim leader in the days following Hasina’s dramatic departure was widely welcomed in Bangladesh, enthusiasm in the country of nearly 174 million people has ebbed amid resistance to reforms and slumping economic growth: The International Monetary Fund estimates gross domestic product growth will come in at 3.8% in 2025, down from 4.2% last year and 7.1% as recently as 2022.

Addressing the dissatisfaction at home, Yunus made reference to earthquake-prone Japan’s experience of overcoming numerous massive temblors. “You understand, this (reform process) is like rebuilding after an earthquake,” he said.

He continued with an allusion to Hasina’s time in office. “For 16 years of earthquakes, everything is shaken, everything is disturbed. So you have time to pick up the pieces to build it again … When you’re building, you don’t want to build [it with] the same wood as before. You want to build it differently.”

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“So the task we’re given in a very short period is to do that,” Yunus said. “People in general, everybody agrees, ‘Don’t go back to the same old days.’ The same old way of doing the election is meaningless.”

A more immediate concern for Yunus than the next election is dealing with U.S. President Donald Trump and his administration on trade. The pair have had a frosty relationship in the past, with Yunus close to Trump’s former presidential rival Hillary Clinton. Yunus himself is no stranger to the U.S.: He studied for his PhD at Vanderbilt University in Nashville, taught economics at a Tennessee university and one of his two daughters is an opera singer based in New York.

But finding ways amid sliding economic growth to make a new deal on trade with the U.S. is a pressing matter for Bangladesh as it faces a punitive tariff of 37% on its exports to the world’s No. 1 economy. The nation’s principal source of income is exporting ready-made garments.

altAerial view of containers and shipyard cranes at Chittagong Port. The port on the Karnaphuli River plays an important role in the Bangladeshi economy, which is heavily reliant on exports of ready-made garments.   © AP

Still, Yunus expressed confidence that he could do business with Trump in efforts to reduce the trade barrier represented by the steep tariffs. “We see [the situation] not as a kind of a threat; we see it as an opportunity,” he said.

For example, Yunus said his country has already offered to buy more American cotton, oil and gas.

“We buy a lot of cotton from Central Asia,” he said. “Cotton from India, cotton from many other countries. We are now looking … why don’t we buy it from the U.S., so [our] trade deficit [with the U.S.] will go down very much.”

On energy, Bangladesh imports most of its oil from the Middle East, but Yunus said the commodity can also be purchased from the U.S.

altThe sun sets behind a field of cotton in Georgia on Nov. 4, 2022. Interim leader Yunus says Bangladesh could boost imports of cotton from the U.S. as it searches for ways to avoid a punitive 37% tariff on exports to the world’s biggest economy.

But Yunus said he was not sure yet of the timeline of trade talks and the percentage of tariffs that can be potentially reduced.

A longer-term economic issue close to Yunus’ heart is the ambition to set up a brace of sovereign wealth funds if assets can be recovered that Bangladesh’s leadership says were illegally siphoned off, mostly out of the country, by former leader Sheikh Hasina and her administration. Yunus estimated about $234 billion was removed from Bangladesh, while “$11-12 billion worth of money inside Bangladesh already [has been] identified and attached [and] frozen.”

“We are looking around where the money ended up … It’s a huge legal process, because people in the countries who have received that money are not going to give away that money,” Yunus said. “I’ll be going to London very soon, talk to the lawyers, talk to the people there, experts, about how to get this money back from the United Kingdom, from Europe, the Cayman Islands, other islands in the Caribbean where all this money has been stored. It’s a long process.”

altIndia’s Prime Minister Narendra Modi speaks with Bangladesh’s former Prime Minister Sheikh Hasina during a reception in New Delhi on June 22, 2024. Hasina fled to India after being ousted from her role in August 2024.   © Reuters

In Yunus’ ideal world, the money will help establish a sovereign wealth fund that will pay for education and health care, with another used to “transform” the lives of the poor and help young people. Yunus expressed a particular focus on social business funds, saying, “[the initiative] will need money, and this money will come from here, transforming young people into entrepreneurs.”

Hasina’s presence in India has complicated Bangladesh’s always sensitive bilateral relations with its giant neighbor. But when asked about the strains in the relationship, Yunus emphasized that, “Our policy of having the best of relations with India continues.”

“I always describe the situation by saying you cannot draw the map of India without drawing the map of Bangladesh,” Yunus said. “We’re integrated by nature. So our relationship has to be the best of all relationships.”

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India in May blocked Bangladesh from exporting via its ports like Kolkata, near the border between the two countries, blocking off a key worldwide supply channel for garments made in Bangladesh in response to a Bangladeshi ban on yarn imports through the same ports.

“These are administrative policies. … We have to accept it. It annoys us, but it doesn’t mean that our relationship is destroyed because of that,” Yunus said.

Putting a positive spin on the situation, Yunus said, “We have found alternative ways (to export), and some say that this is better than before … to use our own ports, cargo ships, cargo planes to go up in the air instead of going to India. They have helped us to find a better option.”

altChinese President Xi Jinping, right, speaks during a meeting with former Bangladeshi Prime Minister Sheikh Hasina (not pictured) at the Diaoyutai State Guesthouse in Beijing on July 5, 2019. 

While relations with India remain at a sensitive pitch, Yunus welcomed a growing role for China in investing in Bangladesh. Yunus’ first bilateral state visit since assuming office last year was to China in March this year, where he asked Chinese President Xi Jinping if Beijing would consider lowering interest rates on loans to Dhaka.

“Our economy is very much integrated with the Chinese, because most of our equipment and supplies come from China,” he said.

“They’re cheap, they’re good quality, reliable … this is a very close relationship. Investments are made from China now … so this is how we became close neighbors and formed a friendship.”

altThe Chairman of the Nobel Committee Ole Danbolt Mjoes, left, hands over the 2006 Nobel Peace Prize to Muhammad Yunus in Oslo on Dec. 10, 2006.     © Reuters

If Yunus values close ties with China, he’s also keen to explore the potential for developing links with Asia’s other giant economy, Japan, including through maritime trade.

“One region in the south of Bangladesh could be transformed into a big hub for sea trade. Japan has helped us set up a deep sea port in Bangladesh … we need several terminals to be built,” Yunus said, explaining that such terminals would allow trade to flow directly to and from Bangladesh, bypassing the current need for large cargos to be transferred by Singapore.

“That opens up a whole big economy for us,” Yunus said, also flagging the potential for establishing a Bangladeshi commercial fishing fleet using larger vessels. “So if we build up all this, what Japan is doing is helping us open the door for everybody, because if the business opens up, we can do business.”

altMuhammad Yunus, chief adviser of the interim government of Bangladesh, makes his way to the stage at Nikkei’s Future of Asia conference in Tokyo on May 29. (Photo by Tomoki Mera)

While appreciating how Japan can help Bangladesh, Yunus also sees a way for mutual assistance to become deeper.

“A personal area of interest is how to bring more young people from Bangladesh for caregiving in Japan, for construction work and so on, how to organize Japanese language teaching,” said Yunus, noting that with Japan’s aging, declining population, the country has “a whole long list” of sectors where it needs labor.

“We have lots of people to give … So let’s process the whole thing in a bigger, large number of young people learning Japanese, learning skills that Japan needs, and large numbers of people can come here to work.”

The article appeared in the asia.nikkei

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