Sunday, March 27, 2011

Big Coal Wikileaks Emergency In Bangladesh Does Obama Support Removal Of 100,000 Villagers?

When thousands of Bangladeshi take to the streets again on March 28 th as part of a decade-long battle to halt a devastating British- owned open-pit coal mine, the world will not only be watching whether Bangladesh's government will honor a coal ban agreement from 2006 or resort to violence. In light of disturbing WikiLeaks cables , American and worldwide human rights and environmental organizations will also be questioning why the Obama administration is covertly pushing for Bangladesh to reverse course and acquiesce to an internationally condemned massive open-pit mine that will displace an estimated 100 , 000-200 ,000 villagers and ravage desperately needed farm land and water resources. The short answer, from US Ambassador James Moriarty's leaked memos : "Asia Energy, the company behind the Phulbari project, has sixty percent US investment. Asia Energy officials told the Ambassador they were cautiously optimistic that the project would win government approval in the coming months." Two years ago, an independent review of the coal mine by a British research firm warned: "Phulbari Coal Project threatens numerous dangers and potential damages, ranging from the degradation of a major agricultural region in Bangladesh to pollution of the world's largest wetlands. The project's Summary Environmental Impact Assessment, and its full Environmental and Social Impact Assessment are replete with vague assurances, issuing many promises of future mitigation measures." For US-based Cultural Survival and International Accountability Project, the Phulbari coal mine is nothing less than a "humanitarian and ecological disaster." Last month, Cultural Survival and International Accountability Project joined with Jatiya Adivasi Parishad, Bangladesh's National Indigenous Union, to launch an international campaign to stop the open-pit mine and raise awareness of on- going Big Coal human rights and environmental violations in Bangladesh . I did this interview with Paula Palmer , Director of the Global Response Program for Cultural Survival, to get the backstory on this growing international crisis and CS/IAP's letter-writing campaign. Jeff Biggers: Can you briefly described the controversial history over the British company and the Phulbari open pit mine? Paula Palmer: This Earth Touch article has an excellent time-line of events starting with the Bangladesh government issuing prospecting and exploration contracts in 1994. It also tells the story of the massive August 26 , 2006 protest that resulted in the death of three people, including a 13- year-old child. Huge public protests against the Phulbari coal project involving thousands of citizens started in 2005 and continue through today. In fact, this week there are daily protest events in various locations, building up to March 28 , when organizers say they will blockade major highways unless the government responds to their demands. They are asking the government to honor the agreement signed after the August 26 , 2006 protests, which committed the government to banning open pit coal mining and booting Asia Energy out of the country. Just about the only thing that actually changed after the 2006 protest is the name of the company, which became Global Coal Management. What's fueling these protests? The project would forcibly displace over 100 ,000 people from their homes and their farms without offering them equivalent land in exchange, and reduce access to water for another 100 ,000 people (possibly forcing them to eventually leave their homes and farms). Among the potentially displaced are Indigenous peoples of more than 20 ethnicities who trace their ancestry in the region back 5 ,000 years. Clearly this forced displacement is the cause of the greatest public outcry against the project, but there are other reasons. The project will also contaminate the air and the water, destroy productive farmland in a country where nearly half the population is undernourished, and threaten the biologically and economically valuable marine and terrestrial life in the Sundarbans mangrove forest. JB: The government must make a final decision by June. Do you foresee any compromise or canceling of the proposal? PP: India and Bangladesh just signed an agreement for India to purchase electricity from the Phulbari coal-fired power plant, which seems to indicate a thumbs up for the project. But in the next week we are going to be seeing huge protests again, intensifying the pressure on the government. And international support for the protesters is growing too. Environmental and human rights organizations from the US, Canada, the UK, and India are now urging the government to abandon the project. The government also knows that we are monitoring its handling of the protests and its treatment of protesters for human rights abuses. How can it impose such a project against the will of tens of thousands of citizens? JB: Why is Cultural Survival involved in the Phulbari dispute? PP: Cultural Survival's Global Response program organizes international letter-writing campaigns at the request of Indigenous communities that are struggling to protect their lands and defend their rights. In January, we received a letter from the Jatiya Adivasi Parishad in Bangladesh ( the National Indigenous Union), asking us to support their opposition to the Phulbari coal project. The project sponsors say that 2 ,300 Indigenous people will be forcibly removed from their homes and farms, but Jatiya Adivasi Parishad cites independent researchers who estimate the number as high as 50 ,000. The impact of eviction on Indigenous Peoples is even greater than on other families. They fear that if their small communities are broken apart and dispersed, they will not be able to maintain the cultural traditions, religious practices, and languages that have sustained them for thousands of years. To them – the Karmakar, Shil, Kabra, Patni, Busab, Ghatoal, Bormon Paoch, Rajhongshi, Hari, Paal, Santal and others — the mine may mean ethnocide. Most indigenous families own an acre of land – or less—and they augment their income by sharecropping, selling their labor, or making baskets and other crafts. Their cultural lives revolve around a calendar of religious ceremonies that are closely tied to the land, the harvest, the sacred groves and springs, and ancient burial grounds of their peoples. The mine would sever all those deep cultural ties and threaten their survival as unique peoples. JB: Can you describe the impact of the Phulbari mine on local populations? PP: Thousands of families would be immediately removed from the mine site, losing their homes and agricultural lands. The company cannot offer them equivalent land simply because there is none. This is concerning because studies of " development refugees" have shown that cash payments to families displaced by development projects frequently results in impoverishment. Independent researchers estimate that as many as 220 ,000 people around the mine site would eventually be affected by reduced access to water, forcing them to abandon their lands. There is no plan for compensating these people for their suffering and loss. JB: What can Americans and other foreigners do to show their support of the villagers? PP: Write letters to the prime minister of Bangladesh! This crisis offers the prime minister an opportunity to make a name for herself and for Bangladesh by turning away from the old model of foreign exploitation and fossil fuels, and leading the way toward a sustainable energy future. It makes sense for Bangladesh – a country that will suffer greatly from climate change – to reject coal, a primary driver of climate change. Letters from international citizens will help convince the prime minister to take a historic, principled stand. Go to the Take Action section of the Cultural Survival website, , to join the letter-writing campaign.

Hasina Sougth Int'l Help After BDR Mutiny

After the 2009 BDR mutiny, Prime Minister Sheikh Hasina telephoned India’s external affairs minister Pranab Mukherjee requesting assistance from the international community, The Hindu reported citing a leaked US embassy cable. Though Hasina had not been specific about the kind of help she needed, Pranab Mukherjee had offered “to be responsive” if needed and the Indian government had also rallied London, Beijing and Tokyo, the article published on Sunday said. Nirupama Subramanian wrote that US Embassy Charge d'Affaires Steven White was surprised when he was called in for a meeting with Foreign Secretary Shivshankar Menon on the last weekend of February 2009. That “unusual Saturday meeting” was to discuss the mutiny by troopers of the Bangladesh Rifles a couple of days earlier, and the worry in the Indian government about its implications for the newly elected government of Sheikh Hasina, perceived as being a friend of India, the report said. The cable that was sent on March 2 , 2009 (194661 : confidential), and accessed by The Hindu through WikiLeaks, details the conversation between the American stand-in envoy and Shivshankar Menon. India feared that the Jamaat-e- Islami would exploit the instability resulting from the rebellion to “ fish in troubled waters.” The foreign secretary described the mutiny as long in the planning. Menon did not blame the Jamaat directly for it, but said the party was disappointed by the results of the December 2008 election, and the steps taken by the new government to counter extremism. Secondly, it appears India was worried that the mutiny could affect the civilian government's relations with the military. Menon expressed concern about the likely effect of the violence on the army, which had lost several officers. The foreign secretary indicated this might lead to trouble for the Hasina government with the army. He noted that the mutineers had thrown the bodies of military officials into sewers. But he was encouraged that the army chief was working closely with the government to stabilise the situation. “Menon appreciated the US statement on the violence and stressed the importance of close coordination and consultation between the U.S. and India as the situation developed. He warned that while the initial violence was over, it would take several days before it was clear what would happen next and that further trouble was possible,” the US official cabled. A month later, India continued to be worried about the after-effects of the mutiny. On March 26 , 2009 , the US Embassy in Delhi cabled ( 198952 : confidential) that India's main concern was to stabilise Prime Minister Hasina's government, the Hindu article wrote. The ministry of external affairs deputy secretary told embassy officials that India was concerned about the possible involvement of “radical forces.” He related that many of the known culprits in the massacre were recruited under the previous BNP government and have Jamaat-e- Islami links. The Indian foreign secretary shared with US Ambassador Peter Burleigh his assessment that the situation in Bangladesh was “ fragile” following the mutiny, Nirupama Subramanian wrote. According to a cable sent on April 16 , 2009 from New Delhi ( 202615 : confidential) reporting the meeting, Shivshankar Menon expressed the Indian government's worry that the current environment would allow extremist groups in Bangladesh to destabilise the democratic government and provide them with a “freer hand” to launch attacks in India. “Pressed by the Ambassador to identify which groups India was concerned about, Mr. Menon said that India's worries extended from political parties like the Jamaat-e- Islami to extremist groups like the Harkat-ul-Jihad-al-Islami, Bangadesh (HUJI, B),” the embassy cabled. The Indian official told the US Ambassador that even though petty issues often consumed politics in Bangladesh, he was surprised that despite the instability created by the mutiny, “ politicians were focused on matters such as Opposition Leader Begum Zia's housing.” “India was concerned about a sense of drift in the government and [Menon] judged that the government was not functioning in a normal fashion,” the cable said. The report can be accessed at http: // india-cables/article 1574326. ece.

Grameen Bank And Public Goods

In Tuesday’s column I wrote about Grameen Bank , the pioneering microfinance organization, which has come under attack by the government of Bangladesh. The government has ruled that the bank’s founder, Muhammad Yunus, who won the Nobel Peace Prize in 2006 , must step down from his post as managing director. Yunus has fought the order and taken his case to Bangladesh’s Supreme Court. I argued that it’s important to protect successful social institutions from political maneuvers that could be damaging to them, and that an abrupt and forced removal of Yunus could damage confidence in the bank, which has 8.4 million mostly women borrowers and holds $1.5 billion in villagers’ savings. Over the past two weeks, I’ve interviewed numerous people in Bangladesh — including current and former government officials — to try to ascertain the motives behind the government’s actions. Many suspected that Yunus was being targeted for political reasons. But others said that there were people within the government, as well as across Bangladeshi society, who opposed the work of the Grameen Bank on principled, if ideological, grounds. Simply put, many people don’t think that microfinance helps the poor and they believe that socially- minded businesses, like the Grameen Bank, undermine the work of government. Today, I’d like to address these concerns. On Tuesday I noted that researchers are still debating the effectiveness of microfinance. One reader, Lowell D. Thompson from Chicago ( 11 ), wrote in with a pointed question: “There are questions about the effectiveness of the bank in alleviating poverty? I thought that was its very reason for being in the first place.” The question: ‘Does microfinance work?’ has been posed increasingly in recent years — sometimes in accusatory tones because microfinance, and its leading practitioner, Grameen, have received so much praise. A number of randomized studies (notably those available at the Financial Access Initiative and M.I.T.’s Poverty Action Lab ) have not substantiated the findings of poverty reduction that had been made over the years by researchers relying on less rigorous methods that did not always use comparable control groups. An overview of available research by an independent economist, Kathleen Odell, can be found here (pdf). (Odell’s report was commissioned by the Grameen Foundation, a U.S.-based nonprofit that supports microfinance, but her report is considered by other researchers in the field to be well- balanced and unbiased.) Odell notes that evidence from studies using different methodologies in different settings suggests that microfinance — including both loans and savings services — is, in fact, good for microbusinesses. But she adds that the “overall effect on the incomes and poverty rates of microfinance clients is less clear, as are the effects of microfinance on measures of social well-being, such as education, health, and women’s empowerment.” If this conclusion seems a little confusing, it’s because microfinance is not, itself, one simple thing. It may involve loans, or savings, or a combination of the two, plus training, insurance or other services. Different mixtures can produce different results in different settings. Moreover, the effects of microfinance may unfold slowly over time, while controlled studies, because of their expense, are rarely conducted for more than a year or two. But the biggest new insight may be that researchers are beginning to discover that the way poor people manage their households is far more complex than anyone had previously understood. The elephant in the room is the question: If microfinance doesn’t accomplish anything positive, then why are 128 million poor families busy taking loans? Should we assume that poor people simply don’t know what’s in their best interest? Or do we need to look more deeply into the way poor people survive? That’s what a number of creative researchers are doing today. One example is the collaboration between Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven that culminated in the excellent book “ Portfolios of the Poor: How the World’s Poor Live on $2 a Day. ” The book takes a penetrating look into 300 poor families in Bangladesh, South Africa, and India, with interviews conducted every two weeks to track expenses, earnings and cash flow at a granular level. What the researchers found was striking, and it gets to the question of what it really means for most people to be poor: to live with perpetual uncertainty. “What the research taught us is that the problem of living on $1 or $2 a day is that you don’t actually earn $1 or $2 every day,” explained Jonathan Morduch. “ That’s just an average. Some days you receive $5 and then nothing for two weeks. Life is unreliable. So the challenge for the poor is that you need to put together the right sums to deal with the right challenges in life. And what we saw microfinance was doing for people was offering them a reliable source of money. With microfinance, you get a sum of money that’s promised on the day it’s promised in the amount that’s promised. It’s often the only reliable service that poor people have — and that’s incredibly powerful.” Morduch is far from a microfinance booster. He co-authored a study in 2009 ( pdf ) that  challenged a 2005 study that had often been cited as evidence for microfinance’s success in alleviating poverty. But one big reason why studies have not shown evidence of the impact of microfinance, he said, is because researchers have been looking at the wrong things. They were focused on direct measures like income or household expenditures. Morduch and his colleagues suggest that microfinance may be most effective at helping poor people avert the traumas of a day- to-day, hand-to-mouth existence. It may allow them to smooth out their cash flows so that life is not such a bumpy and stressful ride. But this also needs to be more thoroughly examined. And contrary to the depiction of poor people as passive victims of microlenders — as the field is often portrayed by its critics — Morduch and his colleagues found that the families they followed were “strategic” in their use of credit, often mingling a variety of formal and informal sources. “They weren’t always making the best choices — some did well, some didn’t — but they were very actively managing their affairs,” he said. “Our view is that there’s a lot more going on with microfinance — that it’s helping people keep an income flow, deal with health problems, keep their kids in school, get food on the table every day, and perhaps invest in businesses.” David Roodman, a senior fellow at the Center for Global Development, who is writing a book on microfinance through an “ open book” blog , summarized it well. The stories in “Porfolios,” he wrote, are neither about “ascent out of poverty nor of descent into indigence, but of people getting by by grasping financial tools within reach.” (For those interested in an examination of the Norwegian documentary that sparked the Bangladeshi government’s actions against Grameen, Roodman has a thoughtful post here .) One area where a small, recent randomized study (pdf) has shown impact is in savings for the poor. Researchers Pascaline Dupas and Jonathan Robinson found that self- employed women in Kenya were able to invest more in their businesses and increase household spending when they had access to savings accounts. It appears that having a bank account helped them accumulate money for larger purchases as well as to smooth out risks — in some cases to prevent loss of income due to malaria. Some women used their savings to purchase malaria pills, for example. The researchers concluded that “extending basic banking services could have large effects at relatively small cost.” The other big criticism of Grameen Bank is that it is trying to do something that is properly the job of government. As Aaron from New York ( 18 ) wrote: “The best way to help the poor is not to lend them money … but for government to raise money through taxation and spend it in ways that strengthen infrastructure, educate people and provide for the type of institutions that support a modern, prosperous society.” This is, of course, a very old debate — it gets to the role of government versus the free market — and it will not be settled anytime soon. But in recent decades Grameen and many other organizations have added a new dimension to it by introducing a middle path: the social business — the business that seeks not to maximize profits but to maximize some form of social impact. Historically, economists have assumed that businesses serve society best when they put their heads down and focus only on the bottom line. The most famous expression of this thinking is the dictum, usually attributed to Milton Friedman, that “the business of business is business.” Social businesses seek to harness market forces to provide essential goods and services to people who are typically underserved. Around the world, as we have noted in this column, social businesses provide things like loans to small farmers , rural electricity and access to potable water . They also supply health services like ambulance care or cataract surgery . In addition to microfinance, Grameen has helped establish an array of for- and not-for-profit companies such as Grameen Danone, a joint venture with Danone (known to us as Dannon), which markets an affordable fortified yogurt product to address micronutrient deficiencies among the poor and Grameen Shakti, a renewable energy company. Social businesses have evolved to address both the operational weaknesses of many government agencies and the lack of affordable products and services available to the poor through the market. By and large, they are a new invention — and there are many questions about when they should be used. For example, it appears that social businesses can bring things like renewable energy, mobile technologies and affordable housing to poor people faster and more efficiently than governments. However, ongoing access to safe water for all is not something that can be guaranteed without the leadership of governments. Grameen has many such experiments going — which are legally independent of the Grameen Bank. Again, these organizations do not challenge the legitimacy of the government — the government is the only body that represents the will of society — but they can be vehicles that governments can support, and work through, to achieve public policy goals. In future columns, I will explore other examples of social businesses, and look at where and when they seem to be working, or not.

Bangladesh's Marcenary Army And The Stock Market Crash

It seems a serious calamity has finally befallen Bangladesh and only those who live in caves or in the jungle with the wild animals have not noticed. For many indeed, the stock market crashing, not just once but repeatedly, is a veritable nightmare akin to a rollercoaster ride going badly wrong like in one of the sequels to the lucrative film franchise Final Destination in which the passengers of such a horrifying ride all eventually get decapitated or sliced into many bloody pieces. While the average investor in Bangladesh probably feels the harsh and painful sting of having lost his/her entire savings it would appear the vast majority of those in the armed forces have also been badly affected. Things have become so bad that apparently there are ‘rumours of whispers’ within the armed forces that the ‘people’ should be motivated to push the government out of power. Note that it is the ‘people’ who are being urged to do this dirty deed (such a move could be laudable if based on principle rather than pure self-interest) on behalf of the newly impoverished members of the armed forces. It seems that the stock market crashing has for the military the same equivalence of the sky falling or a biblical swarm of locust’s devastating and ravishing the countryside and ruining the entire food stock or even of a Tsunami washing away huge swathes of the coastal regions of Bangladesh. Should we feel sorry for the army officers and soldiers who have lost their shirts (if not their uniforms) in the stock market crash? The answer should of course be a loud and resounding no! One may reasonably wonder if army officers actually have the time to dabble in the stock market and if they do then it should be concluded that they clearly are not doing their real jobs of protecting Bangladesh. If then they lose everything when a bearish sentiment hits the market then their financial losses have logically and solely been caused by their own insane cupidity (i.e. greed) and utter foolishness (i.e. moota budhi othoba hathuri budhi). Did no one in the armed forces learn the lesson of 1996 ? In the face of such idiocy it should now become official government policy that any serving army officer will not be permitted to invest in the share market. It could, however, be convincingly argued that in a capitalist system such a restriction is perverse and irrational. It is my argument that the involvement of armed forces personnel in the share bazaar is a threat to national security and also the discipline of the military as a cohesive and efficiently functioning force. This would be unique to Bangladesh but the role of army officers in the share market has become almost obsessive and similar to an addiction. If a drug addict can be thrown out of the army then why not a share addict? It would be a mistake to blame the share market bubble for having made army officers into mindless money grubbing drones. The malaise within the armed forces actually set in with the United Nations peace keeping missions. Now the sole objective for any self-respecting army officer is to be included on one of these missions. National security and the protection of the country’s territorial integrity have become secondary or even tertiary considerations to these lucrative peace keeping operations as if the role of the army is to make peace. In other words, military officers have now become diplomats and even worse businessmen while they are still in service rather than the protectors of our sovereignty and a force opposing external enemies and other such threats to our national security. It was Professor Mahbubullah of Dhaka University who aptly described the present mindset of the military officers and many soldiers as mercenary. It seems that the armed forces can be bought and sold at a whim (and a price). If in fact the armed forces had any moral integrity then they would not have become involved in the fiasco called 1 /11. At least in midstream they could have replaced the incompetent and greedy Gen. Moin U. Ahmed with someone more able and patriotic. Unfortunately there are few if any such types in the armed forces today. Looking at the veteran officers who were involved in 1 /11 many are now multi-millionaires in dollar terms and a few are allegedly involved in money laundering in the Middle East for powerful persons in Bangladesh and their contacts overseas. Even more shameful than any of this is that military officers disgruntled by the share market debacle have now become active opponents of the government but they could not find the courage to lift a finger when their fellow officers were butchered and slaughtered in Pilkhana like the victims of the gruesome SAW movies. Comically they expect the ‘people’ to rise up now that the share market has crashed rather then doing anything themselves. Such an opportunity has, however, long gone and would probably be undesirable considering the mentality of the officers serving today. Bangladesh will have to wait for a real people’s revolution based on principle and the interests of the country rather than the pauperized imagination of a few army officers.

Awami League Leaders Out To Slam Dr. Yunus

Bangladesh Government Site A section of the ruling Awami League leaders have started a campaign against Grameen Bank founder Prof Muhammad Yunus, who was removed by the government from the post of managing director of the bank on the grounds of being too aged.(The Daily Star ) The anti-Yunus campaign is being conducted when a compromise between the government and the Nobel laureate is in progress, amid the US and few other western countries' call for an honourable solution to the vexed issue. The party has adopted a hush-hush policy to carry out the campaign against Prof Yunus through seminars, symposiums, round-table discussions, and political rallies across the country, party sources said. Prof Yunus was removed from the post of managing director of Grameen Bank on March 1 by the Bangladesh Bank, which the opposition BNP and some international quarters condemned. The Nobel laureate appealed to the High Court challenging the legality of the order the following day but the High Court on March 8 upheld Bangladesh Bank's order. Awami League insiders said the party high command has already instructed a section of its leaders, including some top-ranking ones, to conduct the campaign. Initially, the ruling party kept mum over the Prof Yunus issue. A senior leader of the party told The Daily Star that they have to wage the campaign as some influential international quarters are mounting pressure on the government to reach a consensus with Prof Yunus and the main opposition BNP is trying to gain political leverage from this. “It's the BNP and Khaleda Zia who criticised Prof Yunus during the last caretaker government and now they are speaking in his favour only for political gain. We will also launch a campaign in this regard,” said Awami League Joint General Secretary Mahabubul Alam Hanif. Hanif, who is also a special assistant to Prime Minister Sheikh Hasina, and Mohammad Nasim yesterday criticised Prof Yunus at two separate discussions. Addressing a discussion at the Jatiya Press Club, Hanif said Prof Yunus has introduced Bangladesh as a nation of beggars in the globe although Bangabandhu Sheikh Mujibur Rahman had introduced it as a brave nation that won independence in 1971. “Whenever Prof Yunus goes anywhere, he takes a poor woman with a goat or hen with him and portrays Bangladesh as a poor nation,” he said at the Jatiya Party (JP-Manju) organised discussion. Jatiya Party Chairman Anwar Hossain Manju chaired the meeting. He said the western countries are favouring Prof Yunus in their own interest. Mentioning that the Norwegian government first noticed money being illegally transferred, the Awami League leader said the Nobel laureate evaded tax of crores of taka and siphoned off the money abroad and for this reason foreigners are mounting pressure on the government. He said Prof Yunus never placed floral wreaths at the Central Shaheed Minar or stood beside the victims of natural calamities. Addressing another discussion at Dhaka Reporters' Unity, Nasim, a former home minister, said it is not right to get respect through foreign pressure without showing confidence in the country's court and its people. Condemnation of Blake's statements Engineers Institutions Bangladesh, Agriculturalists Institution Bangladesh and Bangladesh Medical Association yesterday in a joint statement described US Assistant State Secretary for South and Central Asian Affairs Robert O Blake's statements on the Prof Yunus issue and bilateral relationship as diplomatic aggression. It said the laws relating to financial institutions in the country determine who would be the managing director of Grameen Bank. Prof Yunus should be respectful to the laws of the country, said the statement signed by IEB President Nurul Huda, honorary General Secretary Abdus Sabur, AIB President Nitish Chandra Debnath and Secretary General AFM Bahauddin Nasim, who is also a central organising secretary of Awami League and BMA President Mahmud Hasan and its acting Secretary General MA Aziz.


It would be a mistake to consider the Yunus dismissal and ensuing controversy just from the standpoint of these recent events or the family relationship that exists between Yunus and Hillary Clinton.  The story should start from the 1 /11 episode when an American/ British initiative brought in an extended caretaker administration under Dr. Fakhruddin Ahmed backed by the military under Gen. Moeen U Ahmed.  There exists opinion that the sponsors of this enterprise were under the clear understanding and impression that free and fair elections would usher in an Awami League administration which would be democratic in nature and respect human rights and would practice clean and transparent governance. It was also hoped that key energy deals involving US and British companies would be finalized and exploration in the Bay of Bengal permitted, once disagreements with India and Myanmar on the maritime boundary were resolved. Foreign quarters, analysts state, had probably assumed that once the democratic government was installed in power, there would be no obstacles or political difficulties in the country. There were also strategic considerations of more than one foreign power with interests in Bangladesh. Certain regional and international analysts are of the opinion that the US had perhaps expected that India would adopt a policy of containment in reference to China, and this would suit them well. The US had indeed increased cooperation with India on several fronts and it was felt that this was on the basis of understanding that India would “permit” the US greater role in the region. Again, analysts perceive this as a move to counter Chinese penetration and influence.  However, once Awami League came to power in January 2009 , all these hopes and expectations were soon dashed. It took the US a quite some time to realize that things were not going as planned. The goods were not being delivered. The US had probably believed the Pilkhana mutiny and massacre to be an aberration in which internal conflict within the BDR exploded into the open. But then again there existed the opinion, among certain keen observers of the situation, that this tragic incident may have been part of a larger plan to undermine the armed forces and hobble the BDR. This was entirely lost on the Americans. Again, the chaos and anarchy created by Chhatra League was a troubling trend but the US assumed that with time this may be subdued. The US started to become concerned with developments when Khaleda Zia and the BNP began to be directly targeted by the government for harassment. It was only when the government became serious in pursuing war crimes that the US government may have felt something was amiss. It had been hoped that the Awami League would not dig up past issues and divide the country but this is exactly what it was doing first by erasing the name of Ziaur Rahman and then going after the alleged war criminals. The US still remained hopeful that the energy deals would be completed and exploration blocks allocated to ConocoPhillips and Tullow as well as open pit mining permitted in Phulbaria. Two years passed with no sign that the government was ready to move on any of these deals. Instead the US saw the government sign deal after deal with Indian companies (in the energy and infrastructure sectors) and sometimes even in conjunction with state-owned Russian energy companies. It was becoming apparent that US entry into Bangladesh was not going to be a cakewalk and was not fully in tune with America’s perceived aims in regard to China. Analysts of the situation say that while India feared Chinese military growth and economic might, New Delhi was to oppose these through its own military, intelligence, economic and diplomatic arrangements and seek US assistance from a distance and much preferred Russian cooperation in this regard. But it was apparent that India was not adhering to these plans and the Obama administration apparently adopted a go-slow policy in regard to New Delhi. FDI in India decreased significantly and the much touted Nuclear Deal hit one brick wall after another. It was increasingly felt in New Delhi that Obama was treating India with far less respect and importance in comparison with the Chinese. That this may have been a reaction to Indian behavior seems to be conveniently ignored in policy making circles in New Delhi.      It was amidst all this that the Yunus controversy suddenly erupted. In fact, Yunus had been a target for government smear tactics right from the start. This was, however, subdued in nature just to keep Yunus on the defensive and his foreign friends guessing. When it was becoming clear that the western quarters had seen through the game of the Awami League government and its outside ally, the government became more aggressive against Yunus. It was probably the rebellions in the Middle East that triggered the Awami League government to finally act against Yunus. Concerned that Yunus could become the symbol for an anti- government movement and protest organized and sponsored by his friends overseas, the Awami League government decided to eliminate him as a threat.  The fact that Yunus is a close friend to the Clinton family is largely irrelevant in how the US will react if at all. That Yunus is a Nobel Prize winner gives him symbolic significance but it is unlikely that the US will put its interests at risk for one man. That Yunus is also a Congressional Gold Medal holder is of greater import for America making his removal as MD of Grameen Bank a direct slap in the face. The complicating factor for any American response is the fact that this is a democratically elected government in Dhaka which is acting according to law with the judiciary consistently finding in favor of the government.   It is unlikely that the US will act immediately as these developments will take time to digest and a more assertive policy towards Dhaka formulated. Comparisons may be made with the crisis created when Sheikh Mujibur Rahman incurred US displeasure for exporting jute products to Cuba. However, at that time the world was neatly split between the US and USSR. Today’s world is moving inevitably towards multi-polarity but with the US remaining far ahead of other countries for the foreseeable future. A problem for the US could arise if a combination of countries such as India, Russia and China were to align together against American interests. It might be such a concern that would spur the US to act against the Awami League government and also put India in its place. It is now obvious in Washington that in many respects Indian and US interests do not always converge and this has to do with Indian special interests in South Asia. India also may eventually perceive the US as a rival and a competitor in the region and a provocation to China. If the US were to react to the humiliation it is facing at the hands of the present regime then it will be based on preexisting grievances amongst the population of the country. This could emerge from the garments sector, share market debacle, power crisis or due to food price inflation. Most likely there will be a combination of these factors at work that could tilt the public violently against the government. At the same time India and Awami League realize they are both running out of time. India needs the infrastructure projects related to transit to begin immediately so that some of the work will be completed before the 2013 general elections. It appears however that almost nothing will be done in time to meet the deadline. Awami League, on the other hand, cannot give too much to India as this will be viewed with disfavor by the electorate and could be exploited by the opposition parties before the next elections. Awami League also fully knows it cannot do anything to reduce food price inflation or add more power to the national grid. The situation could turn acute during the summer months of 2011 , 2012 and 2013. All indicators suggest that the public are now irate to no end with the government, but BNP and other opposition parties are weak organizationally. Thus the situation over the micro- finance guru has more connotations that meet the eye. He may be a personal friend of US Secretary of State Hillary Clinton, but the reverberations of the treatment being meted out to him by the Awami League government go much further. Will Hasina tone down her tirade against Yunus or will Hillary let it pass? It will be difficult for either of them to simply sit tight, things have gone too far for that.