NRK response to Norad’s report

Money market in Dhaka1My colleagues at NRK yesterday published a report as a response to the report made by the Ministry of Foreign Affairs in Norway.

(Translated via Google and partly corrected by me)

Norad’s new report of the Norwegian aid money for the Grameen Bank differs in several respects from the words of the secret stamped documents that have been in Norad’s archives since 1998. Norad looked away from 109 million at the time, according to the Norwegian Embassy in Bangladesh, was tapped from Grameen Bank.

5. May 1998 the Norwegian Embassy in Dhaka in Bangladesh send a note to Norad stamped “confidential”.
Here it was pointed out that “one of the closest people to Professor Muhammad Yunus” has contacted the embassy and “proposed a compromise”.

Compromise on Aid
The reason was the Norwegian requirement that 608 million kroner, which had been transferred from Grameen Bank to a newly created company (Grameen Kalyan), in its entirety must be returned to the Grameen Bank, which along with Yunus received the Nobel Peace Prize in 2006.

Of the total amount of 608 million kroner was, according to the Norwegian Embassy roughly 279 million provided by Norway.

The compromise was, according to the aforementioned letter from the embassy on that 120 million given in aid from Norway as a “final solution” returned to the Grameen Bank, “against the remaining funds allocated to the Grameen Bank on loans and revolving funds remain in the Grameen Kalyan ownership “.

On 7 December, a week after NRK showed the documentary “Caught in Micro Debt”, Norad/MFA came with a report of what happened with the Norwegian funds.

Here is the conclusion that 170 million was returned to the bank from Grameen Kalyan after negotiations between Norad and the Grameen Bank,and that it was never entered into any compromise:

“With this, Norad and the Embassy’s requirements are met. When the embassy in a letter dated 05/26/1998 coined the term “compromise”, it was linked to the Grameen Bank’s invitation to negotiate a compromise. The Embassy and Norad had met all their demands for negotiations. ”

Contrast
This stands in contrast to the secret stamped documents NRK Brennpunkt found in Norad’s archives. It says that the Embassy and Norad wanted the following Norwegian kroner assistance should be returned to the Grameen Bank:

NOK 120 million awarded to Grameen Bank’s so-called revolving funds (mainly funds for housinh loans) during Phase IV (1993-97).
NOK 64.8 million awarded to Grameen Bank to the revolving fund under Phase III (1989-92).
NOK 94.25 million given to the Grameen Bank to housig loans for flood victims as additional appropriations (1987-92).

According to the embassy “the largest component” of this was the amount to the housing loans. The exact amount will not provide the documents, but said the embassy was “reasonable to consider these funds as a natural resident of the revolving fund and not as temporarily Grameen Bank can give to another institution for a new application.”

Discrepancies in the amount of assistance
There are two circumstances in which the discrepancy is not explained by Norad.
Firstly, the embassy wrote in 1998 that the support given to the revolving funds in the contracts under Phase IV was 120 million. Norad report writing, however, that the amount that was reversed during Phase IV was 106 million.

Norad did not explain the difference of 14 million.

Second, Norad away from the aid of 94.25 million crowns provided as additional appropriations. The largest component of this was the housing loans for flood victims who Embassy / Norad then in the secret documents that had demanded be returned from Grameen Kalyan to Grameen Bank.

“Satisfactory solution”

Despite the fact that Norwegian aid authorities at the time believed that all these Norwegian amounts were unlawfully tapped from Grameen Bank, they went in for a compromise. In the aforementioned letter from the embassy to Norad 5 May 1998 justified this by saying that Norway is not the law in hand expect more:

“After the embassy’s view compromise proposal represents a satisfactory solution in relation to what might be applicable legal

and contractual.”

Others were also involved

It is also worth noting that Norad’s statement does not take up the aid money from other countries and institutions that were transferred from the Grameen Bank to Grameen Kalyan.

Grameen Bank was under the Phase III funded from the Assistance Consortium, consisting of NORAD, SIDA, IFAD, CIDA, GTZ, KfW and the Ford Foundation. Together, these institutions contributed with 420.4 million to the revolving funds in the period 1989-92.

Reputation

In 1998, the contact Norad, SIDA, the Swedish aid authorities to notify them of the transactions from the Grameen Bank Grameen Kalyan. Focus has been told that from SIDA, the Swedish contribution during Phase III was the entire 190 million.

SIDA, however, chose not to pursue the matter, because they did not want to destroy the “credibility of the Grameen family,” as it says in a letter from the Swedish Embassy in Bangladesh, dated 17 March, as the Focal Point has received from SIDA:

“No one wants two make a big thing out of this as it might harm the creditability of the Grameen family and pray That Would detrimental to the whole Cause.”

Based on the secret documents Brennpunkt found in Norad’s archives, there are many factors that the public still have not received an explanation or full access to:

608 million NOK was not that donors were informed transferred to Grameen Kalyan, who had a completely different purpose than the Grameen Bank (among other things, to create joint ventures, invest in other companies, invest capital in shares, etc.).

50 million had already been transferred from Grameen Kalyan to Grameen Telecom / Grameenphone when the embassy raised the alarm. Whether and how much money has gone from Grameen Kalyan for other purposes, is not known.

The Embassy / Norad agreed to a compromise of 170 million, which meant that not all of the Norwegian funds Embassy / Norad ever felt was unjustly transferred, was returned to the Grameen Bank.

We have no evidence to show that Grameen Kalyan has returned the rest of the aid funds provided by other countries / institutions to Grameen Bank’s claim.

Swedish aid agencies (SIDA) would not join in the Norway’s demand for repatriation of funds because they would not

damage the Grameen Bank’s good name and reputation.

The Embassy / Norad reacted strongly to the time that the money was transferred in part to save tax.

Grameen Bank still using tax argument when they are currently defending the transaction.

All documents in the case was classified. Norad has not explained as to why this was done.

53 Responses to “NRK response to Norad’s report”

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