WELCOME TO SCA: THE BANGLADESH AGENDA

S E C R E T SECTION 01 OF 04 DHAKA 001525

SIPDIS

SIPDIS

STATE FOR SCA A/S BOUCHER, FRANKFURT FOR GEETA PASI

E.O. 12958: DECL: 02/20/2016
TAGS: PREL PTER KISL KDEM BG
SUBJECT: WELCOME TO SCA: THE BANGLADESH AGENDA

Classified By: A/DCM D.C. McCullough, reason para 1.4 d.

Something to Sing About
--------------


1. (C) It's not George Harrison's Bangladesh anymore. Major
advances in health, education, and food security have given
Bangladesh a stability and a future that seemed unthinkable
just 20 years ago. Bangladeshis are tolerant, moderate
people who generally live at peace with their Hindu and
Christian neighbors. They fought hard to end military
dictatorship, and are proud of their democracy. Annual
economic growth is a solid 5-6 percent, and, according to
Citibank, there are eight million Bangladeshis with an annual
income of at least $10,000. Goldman Sachs touts Bangladesh
as one of the world's top 11 developing economies. Media
scrutiny of the government's chequered handling of the
Jamaatul Mujahidin Bangladesh terrorist campaign has been
vigorous and even distinguished. Contrary to alarmists in
the political opposition and India, Bangladesh is not on the
verge of becoming a failed, Taliban-style state.


2. (C) And yet, the refrain is strained because virtually
every key trend is negative or, like economic growth,
inadequate for a population shooting toward 250 million
people by the year 2050, all in a land mass slightly smaller
than Iowa. Corruption has probably never been worse, and
escalating politicization of the police, civil service,
universities, judiciary, and, more gradually, the military
erodes governance and democratic concepts. Bangladesh is no
longer dependent on foreign aid, but the big donors -- the
World Bank, the Asian Development Bank, the United Kingdom,
Japan, and then the U.S. -- still provide critical support to
the government's annual development program.


3. (C) The crux of Bangladesh's problems -- and the threat to
every USG interest here, from trade to terrorism -- is a
dysfunctional political system driven by two dueling
matriarchs, Prime Minister Begum Khaleda Zia of the
Bangladesh Nationalist Party and Awami League president
Sheikh Hasina. Their politics is anything goes,
winner-take-all combat. Political violence is common and
usually unpunished. Electoral strategies center not on
building bridges to important constituency groups, like the
private sector or farmers, but on backroom deals with other
politicians selling their support to the most compelling
bidder. "Muscle men" and "black money," Bangladeshis lament,
have sapped the appeal and soul of both parties.


4. (C) Islamists offer frustrated Bangladeshis a simplistic
solution, Sharia law. Some, like Jamaatul Mujahidin
Bangladesh (JMB),are revolutionary, while others, like
Jamaat Islami, claim to be evolutionary. Many Bangladeshis
uncomfortable with the Islamists' historical ties to
Pakistan, and their attitudes about women and culture, are
nevertheless appreciative of the Islamists' reputed
incorruptibility and their social welfare programs.
Ironically, Jamaat Islami, the main Islamist party, is
internally more democratic, meritocratic, and issue-based
than its mainstream rivals. Like any party in government, it
exploits its position to place its supporters in the
bureaucracy and, to some extent, the military. Jamaat Islami
is a late convert to democratic constitutionalism, but it
appears committed to the political process, at least until it
hits an electoral plateau. Given the huge challenges it
faces to raising its national vote total above 10 percent,
Jamaat Islami could face that crossroads as early as the 2012
election.


5. (C) Following a belated government crackdown, JMB's
dramatic collapse since its last and deadliest attack on
December 9 suggests JMB lacks the battleground resiliency of,
say, its Pakistani counterparts. Or, according to the Awami
League, it proves the government is JMB's puppet-master.
Either way, only time will tell if JMB's attacks were an
isolated episode or the opening of a longer campaign. With
the immediate crisis apparently over, political attention is
reverting to the general election expected in January 2007.


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6. (C) The BNP/Jamaat Islami coalition is set to stay in
office until it hands over to the 90-day Caretaker
administration in October. The United Kingdom, the European
Union, Canada, and Australia share our concerns about the
potential for electoral turbulence. Along with UNDP, we are
working together to promote political party professionalism
and a successful election. The 2007 election will be the
most monitored in Bangladesh's history.

The USG Agenda for the Next Nine Months
--------------


7. (S) Per our Mission Performance Plan, our top four goals
are:

A) Counter-Terrorism: There are unsubstantiated reports that
the Pakistan-based, al-Qaida affiliated Lashkar-e-Tayyaba has
tried to establish a presence in Bangladesh. There is also
mostly speculative reporting on Indonesian, Thai, Burmese,
and northeast Indian terrorist links to Bangladesh.
Persisting concerns about possible attacks on Peace Corps
volunteers led to the indefinite suspension of the program on
March 12. There is no doubt that Bangladesh is vulnerable to
terrorist exploitation, especially as a safehaven. It has
weak intelligence and law enforcement agencies, porous
borders, endemic corruption, a small but sympathetic Islamist
fringe, proximity to problematic parts of the world, and a
government that fears the domestic and international
complications of acknowledging that terrorism might exist in
Bangladesh. With the notable exception of the 2004 grenade
attack in Sylhet that seriously injured the British high
commissioner, there have been no attacks on foreigners.

-- Positive Developments: The duration and extent of the JMB
crackdown has been a surprise to those who doubted the
government's capacity to act effectively. Bangladesh now
adheres to 12 of the UN's 13 UN counterterrorism conventions.
The Bangladeshi central bank has established a basic
enforcement framework for the country's anti-money laundering
law. With major USG input, draft legislation to combat
terrorist financing and bolster anti-money laundering
provisions is moving forward.

-- Watch For: Does JMB strike back? Do senior JMB leaders go
to trial? Are there embarrassing revelations about
JMB-BNP/JI linkages? Does the government
address/investigate/punish the senior police officers and the
four BNP leaders who protected Bangla Bhai during his group's
vigilante reign of terror in northwestern Bangladesh in 2004?


B) Democratic Practices: We want elections whose outcome is
broadly accepted as accurate and legitimate. We urge the
opposition to exercise, not surrender, its democratic rights
and to use democratic means, not strikes and street violence,
to advance its interests. The BNP, we say, must allow the
opposition to function effectively and fairly. Our focus is
on principles and international standards; we leave the
details -- like who becomes the Chief Election Commissioner
or how the Caretaker regime is structured -- to the
Bangladeshis.

-- Positive Developments: After an 18-month boycott as part
of its broader opting out of the political process, the Awami
League returned to parliament in February to pursue its
demands for major electoral and Caretaker regime changes. PM
Zia proposed a bipartisan committee to pursue the matter.
Party leaders are giving mixed signals about their
willingness to launch such a committee, but both sides are at
least now trying to appear interested in dialogue and
resolving disputes.

-- Watch For: Does the BNP, through "false" criminal cases
against political rivals, police intimidation, and
transparent rigging of the electoral machinery, confirm that
it will do whatever it can get away with to win? Does the
Awami League stick to its threat to boycott the election if
its reform proposals are rejected? Can the Awami League
finally find an issue and a strategy to build political

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momentum against the BNP? If the BNP becomes the first
Bangladeshi government ever to win re-election, does the
problematic heir apparent of PM Zia, her corrupt son Tarique,
move to take over as expected before the next election? If
the Awami League loses, how loudly does it cry foul, and how
does it cope with internal tensions arising from the prospect
of ten years out of power?

C) Economic Growth: Despite robust economic growth rates, the
economy suffers from extreme manifestations of common third
world deficiencies in governance, infrastructure,
transportation, telecommunications, due process, inconsistent
and opaque government decision-making, and, of course,
corruption. Deteriorating availability of electricity,
water, fertilizer, and fuel supplies are, in concert with
rising commodity prices, a major problem for the BNP.

-- Positive Developments: Fears of massive layoffs and losses
in the garment industry after the end of Multi-Fiber
Arrangement export quotas in 2005 failed to materialize, at
least for now. Instead, Bangladeshi garment exports actually
rose 27 percent. USAID-assisted efforts to diversify exports
have come in well above target, especially in frozen shrimp.

-- Watch For: The extent of election-related violence,
disruptions, and costs on economic activity.

D) Respect for American Values: Virtually every Bangladeshi
Muslim opposes USG policies in Iraq and Afghanistan, and many
see the war on terror as anti-Muslim. However, Americans
remain generally well regarded as people, and the bilateral
relationship is relatively straightforward and positive, free
of cold war or regional political baggage. Bangladeshis view
the suspension of the Peace Corps program with regret, not
bitterness. Our public diplomacy programs emphasize shared
values, respect for religion, tolerance, and the danger to
all of extremism and terrorism.

-- Positive Developments: On March 14-16, the fifth-annual
"America Week" was held in Chittagong, Bangladesh's second
largest city, to showcase to about 8,000 visitors in a
fair-like setting the variety of USG programs and
partnerships in Bangladesh. Last December, the son,
daughter, and widow of Archer Blood, the U.S consul general
in Dhaka who in 1971 pioneered the dissent channel to protest
Pakistani genocide during the war of independence, attended
the launching of the Archer Blood American Center Library to
honor the memory of one the best-loved Americans in
Bangladesh.

-- Watch For: In April, still the most popular American in
Bangladesh, retired Marine Corps general Henry Stackpole,
will return to Bangladesh to commemorate the 15th anniversary
of "Operation Sea Angel," whose relief efforts after Cyclone
Marine are credited with saving the lives of over 140,000
Bangladeshis.

Trump Card
--------------


8. (C) As we pursue USG interests in Bangladesh, our trump
card is that no country -- not India, Saudi Arabia, Kuwait,
the UAE, or China -- casts as broad a shadow here as the
United States. The visible trappings of a successful
relationship with the USG are important to any Bangladeshi
government as a recognition of its legitimacy and acceptance
of its policies; this is why the BDG badly wants Millennium
Challenge Account support, and why PM Zia would jump on an
airplane tonight for a White House visit. If deftly played,
the "shame" card can produce notable benefits, like the BDG's
crackdown on human trafficking in 2004 and its banning of JMB
and another extremist Islamist group in early 2005. However,
if a USG demand were viewed as jeopardizing a core BNP
interest, like its electoral standing, the BNP believes that
the geographical breadth of its trade and investment
relationships, and the lack of Western appetite outside of
Washington, London, and maybe Ottawa for political
confrontation with Dhaka, effectively insulates it from major
external pressure.

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9. (S) The last PCC on Bangladesh recognized the great
importance of regularly sending senior USG officials to Dhaka
to hammer away on key points with the BDG and the Bangladeshi
public. The BDG revolves around competing personal
relationships and proximity to the prime minister, so there
is no substitute for personal, direct contact when
communicating potentially problematic messages to a
government increasingly preoccupied with elections.


10. (U) We hope to have the opportunity to receive you in
Dhaka in the near future.
CHAMMAS