C O N F I D E N T I A L DHAKA 002748

SIPDIS

E.O. 12958: DECL: 06/13/2010
TAGS: EFIN PGOV EAID BG
SUBJECT: AMBASSADOR PAYS FAREWELL CALL ON FINANCE MINISTER

Classified By: P/E Counselor D.C. McCullough, reason para 1.4 b.


1. (SBU) On June 12, Ambassador called on Finance Minister
Saifur Rahman to discuss the latter's recent trip to
Washington and other issues. He was accompanied by USAID
Director George and econoff (notetaker). Septel reports
Rahman's comments on the new BDG budget.


2. (C) Noting that he would soon be departing post, the
Ambassador thanked Rahman for his support and cooperation on
key issues over the past two years. Rahman wished the
Ambassador well, and expressed appreciation for his help in
setting up a productive series of meetings for Rahman's
recent visit to Washington.


3. (C) Rahman highlighted as particularly important his
meeting with new World Bank President Paul Wolfowitz, who he
said was in a "listening mode" that allowed Rahman to explain
fully his perspectives on Bangladesh. Rahman added that
opposition Awami League president Sheikh Hasina had sent a
letter to Wolfowitz listing alleged human rights abuses in
Bangladesh and urging the Bank to support her call for an
early national election and reforms in the caretaker
government system. Such letters, Rahman complained,
discredit Bangladesh and undermine BDG efforts to promote
development.


4. (SBU) Ambassador asked about BDG progress on issuing
municipal bonds, and cited a December 2004 seminar that
discussed the advantages of bonds for generating revenue at
the municipal level. The BDG, he observed, is heavily
centralized, in part because local governments have no
independent revenue. He encouraged the minister to implement
a pilot bond program in two localities, one urban and one
rural. Rahman undertook to pursue the matter with World Bank
Country Director Wallich.


5. (C) USAID Director acknowledged the BDG's acute interest
in qualifying for the Millennium Challenge Account (MCA).
While Bangladesh has made significant strides in most areas
of MCA concern, especially in human development and
education, he said, corruption remains an over-riding
obstacle for Bangladesh. The BDG could boost its case by
demonstrating strong, effective action against corruption.
He encouraged Rahman to work with the USG on developing
strategies and mechanisms to combat corruption.


6. (C) Turning to the new but troubled Anti-Corruption
Commission (ACC), USAID Director expressed concern over its
slow start and its lack of enforcement authority. Rahman
agreed that the ACC has not functioned as hoped but said he
has organized a high-level BDG meeting to discuss the role of
the ACC and identify ways to give the ACC "some teeth." He
asked the USG for resources and technology to build
enforcement and regulatory capacity in the ACC.
THOMAS