Norway suspends aid money to Uganda

Norway has suspended aid to Uganda after an audit found that 13 million dollars had been embezzled. Three other European countries previously ended aid to Uganda over similar theft. Uganda says that they have fired 12 government officials who are suspected of taking the money.

From Reuters Alert Net, writer  Elias Biryabarema gives us more details.

The growing scandal adds to concerns about corruption under President Yoweri Museveri, accused by his critics of creating a culture of impunity for cronies who steal public money but are loyal to his party, the National Resistance Movement (NRM).

Norway joined Britain, Ireland and Denmark in suspending aid after Uganda's auditor general last month exposed the theft of funds meant for reconstruction in two impoverished regions. It implicated officials in the prime minister's office.

"Norway has suspended any disbursements to Uganda government institutions until further clarification has been provided," Ambassador Thorbjorn Gaustadsather told Reuters, saying Norway's total aid to Uganda amounts to about $70 million a year.

Uganda's information minister, Mary Karoro, said the government was determined to punish all officials involved in embezzling the money that was meant to fund recovery efforts in northern areas after an insurgency by the Lord's Resistance Army in the 1990s and early 2000s.

Norway clears Muhammad Yunus' Grameen Bank of any wrong-doing

Norway has cleared Muhammad Yunus' Grameen Bank of any wrong-doing from a misuse of funds accusation. The claims that Yunus' Grameen Bank diverted money away from its intended use was made by a recent Norwegian documentary. A loan Norway gave to the Grameen Bank was transferred to another company within the Grameen family for tax purposes. Norway stated on Tuesday that Grameen was innocent and that the funds were used for housing loans as intended.

From the Economic Times, we read more about the statement from Norway and another statement from Bangladesh that will continue to beat a dead horse.

The claims were based on series of letters dating from 1996 to 1998 -- a decade before Yunus and Grameen were awarded the Nobel Prize in 2006 -- showing a conflict between the Norwegians and Grameen over the aid transfer.

After a review, Norway's minister of international development Erik Solheim said in a statement Tuesday that there was "no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds."

Grameen maintained the transfer of aid to Grameen Kalyan, another part of the group, was legitimate and done to minimise tax on the money.

"We are very happy that actual proof (of Grameen's innocence) has come to light and we hope this will end all debate about Grameen," Grameen spokesman Mohammad Shahjhan said.

Yunus and microfinance have come under fierce attack from Bangladeshi Prime Minister Sheikh Hasina , who called Sunday for a full investigation of a sector she said "does not lift people from poverty."

"Is there any other business that forces people to pay 30 to 40 per cent interest on loans?" Hasina asked, describing Grameen's transfer of Norwegian and other European aid money in 1996 to avoid tax as a financial "trick".

Bangladesh to investigate money diverting claims against Yunus' Grameen Bank

The controversy surrounding accusations a Norwegian documentary made against Muhammad Yunus' Grameen Bank has taken another step. The government of Bangladesh is going to begin its own investigation into the claims.

A TV documentary said that a loan made from the Norwegian government to Grameen Bank was diverted into another Grameen company. The loan was meant to aid low income housing. Grameen has other companies that serve the interest of the poor in addition to the microcredit bank.

The matter does appear to already have been settled between the Bank and Norway but the TV show has stirred the pot again.

From Monsters and Critics, we find out more about this new investigation on some old news.

Nobody is above the law, no matter how big or how honourable he or she is; finding out the truth is more important,' Foreign Minister Dipu Moni told reporters Tuesday.

Yunus, a Bangladeshi economist, is founder of the micro-credit organization Grameen Bank. He was awarded the peace prize in 2006.

Norwegian state television last week reported that Yunus had diverted nearly 100 million dollars in aid from Norway, meant to support the poor through micro-credit programmes, to one of his own companies.

In Oslo, Environment and International Development Minister Erik Solheim appeared to be reassured, citing a fresh report he commissioned from development aid agency Norad.

The measures were taken in 1998, the report said.

'According to the report, there is no indication that Norwegian funds
have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds,' Solheim said in a statement.

Norway launches $117 mln microcredit fund

Article from Reuters and writer Aasa Christine Stoltz.

The Norwegian government, companies and a private investor have formed a $117 million microcredit fund aiming to help people in poor countries out of poverty, although critics have said its interest rates will be too high.

It will be one of the world's biggest funds in the field of microfinance which involves lending small sums of cash to poor entrepreneurs who would otherwise not have access to traditional banking or credit facilities.

Privately owned financial group and initiator Ferd has joined with banking group DnB NOR, insurance company Storebrand, life insurer KLP and the government to set up the 600 million Norwegian crowns ($117.1 million) fund.

The state will contribute 50 percent of the fund, and the other partners the rest, the foreign ministry said.

Dubbed the Norwegian Microfinance Initiative (NMI), the fund will help to provide small loans without collateral to poor people in developing countries, Development Aid Minister Erik Solheim said in a statement on Monday.

It will invest in microfinance institutions by providing capital, loans or guaranties, Ferd said.

"Microfinancing has shown that it actually works, it helps poor people to help themselves," Johan Andresen, initiator, owner and chief executive of Ferd told Reuters.

Norway makes 500-million-dollar pledge at Sudan donor conference

from Monsters and Critics

Donor countries and international agencies Tuesday met with representatives of the government of Sudan and the Sudan People's Liberation Movement (SPLM) to discuss new aid commitments to shore up a three-year old peace deal on Sudan.

Norway, hosting the meeting that ends Wednesday, helped broker the 2005 peace deal that ended a two decade long civil war and Oslo also hosted a donor meeting in April 2005.

'A lot has been done but more has to done,' Norway's Environmnent and International Development Minister Erik Solheim said, noting the need to integrate the former SPLA rebel forces with the Sudan army.

Citing his experience as mediator in other conflicts, Solheim underlined the need for 'political will' to achieve progress.

Solheim said Sudan was heading for a more 'volatile' period with elections due next year, adding that 'the international community was ready to assist in organizing free and fair elections.'

Like several other speakers at the meeting - chaired by Sudan, the government of southern Sudan and the organizers, the World Bank and the United Nations - Solheim also touched on the conflict in Darfur warning it had implications for the overall peace process.

'Long-term development aid' aimed for north Sudan and south Sudan had been 'diverted' for humanitarian aid to Darfur, Solheim said.

Solheim jump-started the pledging session due Wednesday saying Oslo would pledge 500 million dollars for the coming four-year period.

Sudan's Second Vice President Ali Osman Taha urged delegates to make 'robust' pledges, saying Sudan needed to know what funds were available for development projects.

UN Deputy Secretary General Asha-Rose Migiro said in her remarks that 'reintegration funding must be in place before demobilization takes place.'