Ashequn Nabi Chowdhury
Journalist, Author, Former Diplomat
Professor Muhammad Yunus is renowned for his persuasive public speaking skills, capable of captivating audiences and shaping narratives to serve his interests. At the recent Bangladesh Investment Summit 2025 in Dhaka, he once again seized the spotlight by delivering a passionately charged speech that garnered international attention.
With dramatic flair, Yunus recounted the horrors of the 1974 famine, portraying himself as a compassionate visionary deeply affected by the plight of the poor. He claimed that this tragedy inspired his groundbreaking work in microfinance and the establishment of Grameen Bank—a story that has solidified his reputation as a global humanitarian.
However, Yunus’s narrative has drawn criticism for omitting certain contextual details. While he emphasized the famine’s role in inspiring his poverty alleviation efforts, he did not mention that his microfinance project began in 1976 as part of a Chittagong University economics department initiative in Jobra village. He also did not acknowledge the official establishment of Grameen Bank in 1982 with government support, nor his adoption of principles from the Colombo Bank of Microcredit and the influence of Sri Lankan students during his time in the United States.
In 2006, Yunus and Grameen Bank gained international recognition with the Nobel Peace Prize. Despite Yunus being widely credited as the ‘microfinance guru,’ the concept traces its origins to the 1950s when Akhtar Hameed Khan introduced it in East Pakistan. Yunus popularized and refined the model through Grameen Bank.
Grameen Bank is well-known for its contributions to poverty alleviation and for empowering women through microloans. However, it has faced criticism for high interest rates and aggressive debt collection practices. Some media reports have suggested a connection between borrowers’ suicides and the stress of repaying loans under these conditions. While Muhammad Yunus has undeniably helped many individuals, questions remain about the balance between financial inclusion and ethical lending practices.
He faced significant criticism for allegedly exploiting the poor by charging interest rates of up to 44% for loans from Grameen Bank. He denied these allegations, but David Roodman, a senior fellow at the Washington, D.C.-based Center for Global Development, conducted an analysis in 2010 that revealed the effective interest rate at Grameen Bank during Yunus’s tenure ranged from 20% to 25%. Furthermore, it increased to 44% for borrowers who were required to maintain a restricted savings account to access loans.
In his address at the Investment Summit, Yunus spoke about the impact of the famine but provided only a limited explanation regarding its causes. A more in-depth exploration of its root causes would have been beneficial, offering essential context and clarity while helping to mitigate public speculation and misunderstandings about the most significant natural disaster in Bangladesh’s history.
The famine of 1974 was a significant event shaped by a range of factors, with catastrophic flooding being a primary contributor. This flooding not only ravaged the agricultural sector but also caused widespread unemployment in a newly independent nation grappling with the aftermath of a nine-month struggle for freedom. Nobel Laureate Professor Amartya Sen has thoroughly analysed these issues in his articles, providing valuable insights that deepen our understanding of such crises.
“The starvation was initiated by regional unemployment caused by floods. These floods affected food production many months later when the reduced crop was harvested. However, the famine occurred earlier, before the affected crop had matured.”
Contributing to the crisis was a global food shortage, primarily driven by the Soviet Union’s aggressive grain purchases from the United States in the early 1970s. As detailed in the compelling book “The World for Sale” by Javier Blas and Jack Farchy, published by Oxford University Press in 2021, the Soviet Union, confronted with serious domestic crop failures, strategically acquired around 10 million short tons of grain from the US. This operation, famously dubbed the “Great Grain Robbery,” put immense pressure on global supply chains and fuelled skyrocketing grain prices worldwide, intensifying food insecurity in nations like Bangladesh.
Apart from this global food crisis, the newly formed Bangladeshi government also struggled with poor infrastructure, inefficient food distribution, and administrative inexperience. Food grain smuggling to neighbouring countries further worsened domestic shortages.
During his speech, Yunus acknowledged that Bangladesh has made significant progress in recent years. However, he did not mention the contributions of the Awami League government, led by Sheikh Hasina, over the past 15 years. Nevertheless, Sheikh Hasina’s economic successes have received global recognition, including praise from the Geneva-based World Economic Forum (WEF).