GrameenPhone, the primary case study in You Can Hear Me Now, is preparing to sell $300 million worth of shares on the Dhaka and Chittagong stock exchanges in Bangladesh. The company, a subsidiary of Norway’s Telenor, is valued at $3.2 billion. Get more details from The Daily Star, Dhaka’s premier English-language daily.

The IPO, although very small by Western standards, is a significant step forward for Bangladesh’s capital markets, which have been strengthening over the part five years. “It will be a breakthrough for the country’s capital market history,” said Abu Ahmed, professor of the Department of Economics of Dhaka University. The IPO is planned for the end of September.

The fact that GrameenPhone, which is owned by Telenor, a publicly traded company in Norway, is offering shares in Bangladesh is significant because it gives Bangladeshis a chance to buy into one of the country’s strongest corporate performers. This has long been a bone of contention between Muhammad Yunus, the Nobel laureate and founder of Grameen Bank, which owns 38% of GrameenPhone, and Telenor, which owns 62%. At his Nobel acceptance in Oslo, Yunus made several “in your face” comments about Telenor. Yunus now asserts that the owners of Grameen Bank are entitled to buy 20% of the shares being offered and that they have the capital to do so.

This silly jousting aside, the IPO may well propel other telecoms to list in Bangladesh, including Egypt’s hyper-successful Orascom, which operates Banglalink.

Muhammad Yunus, founder of Grameen Bank and winner of the 2006 Nobel Peace Prize, is almost certain to enter politics within the month and step down from Grameen Bank, according the Dhaka’s Daily Star. He is expecting to run as an independent in Bangladesh’s upcoming elections. An editorial in the Daily Star, “We need local leaders not national personalities,” written by an ex-pat Bengali, takes a dim view of this prospect. Ironically, others within Bangladesh feel that Yunus more appeal more to Westerners and ex-pats than those living in the country. But, no one knows, least of all Yunus himself.

Asked what he would be like in a partisan role, he replied, “I do not know.”

Separately, Yunus this week announced he wants GrameenPhone to list on the Dhaka Stock Exchange and offer one share to each of Grameen Bank’s 6.9 million borrowers.

A very interesting opinion piece in the Jan. 29 Wall Street Journal notes that both the Nobel Prize winner in economics (Edmund Phelps) and peace (Muhammad Yunus) highlighted the impact of entrepreneurship in their Nobel addresses. “Phelp’s Prize” by Amar Bhide, a professor at Columbia University, and Carl Schramm, president of the Kauffman Foundation, picks at the open wound between plain-old entrepreneuers and social entrepreneurs. I basically agree with them, but I also beg to differ as I think they compare apples and oranges. (I don’t link to the article because I don’t have a subscription to wsj.com.)

Of the 35 winners in economics, 28 never mentioned the word “entrepreneur.” Phelps mentioned it 17 times–more than the total over the previous 19 years! Yunus mentions it 6 times. Twenty-three mentions in two Nobel speeches has to be a record. But it is almost as if the laureates had a different dictionary in front of them when choosing their words.

Phelps talks about a transformative entrepreneurship that is central to capitalism, by sparking growth of small businesses that become large commercial operations; Yunus talks about microloans that don’t involve economies of scale or lead to significant new enterprises. The writers ask, ” Can turning more beggars into basket weavers make Bangladesh less of a, well, basket case?”

Well, no–but. It’s a false dichotomy–and the writers know it. They note Bangladesh’s export-oriented garment industry as being “larger and more productive than individual craftsman,” which is true, as a way of saying that it is better to provide venture capital to growing businesses than seed capital to individuals. They also note that government reforms, such as those that are now propelling Vietnam to new heights, are more important than microloans. But because the Bangladesh government is intractably backward and corrupt and anti-private business, does that mean that Yunus’s loans are a bad thing? I think the writers are reacting to the hoopla rather than the reality.

I am not an unabashed proponent of microloans, because I agree with the writers that while they may lift individual families out of poverty, they do not scale an economy. But I do not think microloans are a bad thing–how could they be? Some, such as Alexander Cockburn in The Nation (”The Myth of Microloans”), paint microloans as the devil incarnate, due to farmer suicides in India.

To me, the issue is clear: Capital that helps people raise a cow and escape poverty is as good as capital that helps start an Apple Computer. Yes, there’s a difference of scale. But there’s also a difference of context. The two sources of capital are not comparable–one’s in America, one’s in Bangladesh. But that doesn’t mean they’re not both productive.

And what about microloans that help build a GrameenPhone, the largest and most successful business in Bangladesh? It would not have been built without microloans that allowed distribution into rural villages, because Grameen Bank would not have backed the project. Does that not count? The authors cannot take a potshot at Yunus’s track record without examining his full portfolio. 

Straw-man arguments are not compelling. It’s not either-or. Let’s deal with the facts on the ground–and celebrate entrepreneurs and capital that builds businesses of all kinds.

The political crisis in Bangladesh is worsening, with the country in a “state of emergency” and the head of the caretaker government having stepped down. (See “Bricks, sticks and bullets” from Jan. 8th.) It now seems that elections scheduled for Jan. 22 may not take place. Textile exporters, one of the country’s biggest industries, have noted a huge drop in orders. New foreign investors are holding back. Telenor, the biggest existing foreign investor, is sitting pretty. Cell phone companies thrive in times like these.

The crisis is not new, and not complex, and has roots going back 30 years. It’s the tale of two women who hate each other (probably with good reason). Here’s a great AP story that clearly describes the subtext to the chaos in the streets of Dhaka.

Nobel Peace Prize winner Muhammad Yunus gave a great speech (Yunus spells out nation’s rosy future)  in Feb. 2006 citing the need for new blood in Bangaldeshi politics. He was right.

From issue #39 of Ode magazine, which has done a great job of reporting on the Grameen empire over the years, a cover story on Muhammad Yunus, with some insight into what makes the Nobel laureate tick: 

In his phenomenal book The Tipping Point, journalist Malcolm Gladwell discusses how “social epidemics” come into being, whether the trend involves the miraculous comeback of outmoded shoes or a seemingly inexplicable increase in suicides among young adults in Micronesia. Gladwell distinguishes among three types of people, all of whom play a crucial role in helping bring an idea into the world: connectors (who have the right contacts), mavens (knowledgeable people with a strong need to help others make an informed choice) and salespeople (who influence people to buy certain things or behave a certain way).

Muhammad Yunus embodies at least two of these types, according to Iqbal Quadir, who took the initiative to establish a nationwide cellphone company in Bangladesh with the help of Grameen Bank, what later became known as GrameenPhone (see Ode, April 2005).

“Yunus is a super connector. He knows exactly what to say when he is with people like Bill Clinton, who helped Yunus be known around the world, or when he is talking to poor people in the villages in Bangladesh. He can connect with people easily.” And Yunus is a salesperson par excellence in a positive sense, says Quadir: “He can convince people easily.”

But there’s an even more important factor at play, according to Quadir, founder and director of the MIT Program in Developmental Entrepreneurship. Yunus is “a very practical man,” he says. In other words: Yunus gets things done.

The simmering dispute between the two shareholders of GrameenPhone, Norway’s Telenor (62%) and Bangladesh’s Grameen Telecom (38%), is about more than business and money–it’s about national identity.

From the bangla_ict Yahoo Group today, a pointed comment from Sayeed Rahman about Telenor replacing the red-and-green GrameenPhone logo with Telenor’s corporate logo about a month ago:

GrameenPhone is extremely successful in doing business in Bangladesh, with the previous Red and Green logo. The previous logo was consistent with Bangladeshi Flag. So now the necessity of changing logo is yet to be justified. People of Bangladesh used to love the logo, the brand name. In Bangladesh, GrameenPhone is not just a mobile company, its more than that. It’s a story of connecting the rural people with the world, revolutionizing the communication in a country like Bangladesh, contributing to the society in various helpful ways.

Meanwhile, Norway’s Aftenposten reported the day before the Nobel award that the dispute over majority control was not a clear-cut case, and was causing “embarrassment” for Norway’s politicians (Telenor Conflict Puts a Damper on Peace Prize Ceremony):

One of the co-founders of GrameenPhone supported Telenor, telling newspaper Dagens Næringsliv over the weekend that the firm’s shareholder agreement was “vague.” He also said that Grameen Bank failed to buy additional shares in GrameenPhone when offered them and didn’t protest when Telenor bought them up and raised its initial stake of 51 percent to the 62 percent it holds today.

Several Norwegian politicians have called the conflict “embarrassing” and the secretary of the Norwegian Nobel Committee tried to keep it off of the agenda at a press conference on Saturday.

I realize this is inside baseball, but it is highly unusual to have a Nobel award ceremony devolve into mulitnational boardroom politics. And I must say that when researching my book, the issue of Telenor’s “intention” to reduce its shareholding to 35% was a very loose thread, which now appears will shortly be snipped off or tied up.