BANGLADESH - THE GOOD, THE BAD AND THE UGLY

C O N F I D E N T I A L DHAKA 000685

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/26/2017
TAGS: PREL PGOV KDEM BG
SUBJECT: BANGLADESH - THE GOOD, THE BAD AND THE UGLY

Classified By: Ambassador Patricia A. Butenis; reason 1.4(d)


1. (C) Summary: The interim government formed following
the January 11 declaration of the State of Emergency has
pursued an aggressive agenda of political and economic reform
coupled with an anti-corruption campaign and institutional
change all designed to create conditions conducive to free,
fair, credible and transparent elections and a return to
elected democracy. Three months into its indefinite term of
office, the Caretaker Government (CTG) can claim some
important successes, despite some embarrassing blunders.
Continued restraints on civil and political liberties and a
mixed record on safeguarding human rights, however, threaten
to undermine the government's reputation, while the military
continues to play a significant role behind the scenes. End
Summary.

Noteworthy Accomplishments
--------------


2. (U) Caretaker Government: President Iajuddin's
resignation as Chief Advisor (under pressure from the
military) initiated the complete reconstitution of the CTG
under new Chief Advisor Fakhruddin Ahmed and ten new advisors
generally accepted as politically neutral. The change
addressed a key opposition demand for a neutral Caretaker
Government.


3. (U) Elections: The donor community, principally the
UNDP, is working closely with the Election Commission on its
reform agenda. The CTG has moved to address the principal
objections raised by opponents of the January 22 elections.
The dysfunctional and politically charged Election Commission
was replaced with three new commissioners generally
recognized as competent and neutral. The new EC announced a
two phase, 18-month program to address the highly contentious
voter list revisions, including a photo identification
element. Election reforms are proposed to improve financial
transparency and encourage internal political party reform.
Allegedly partisan local election officials appointed at the
end of the previous government will be tested for their
knowledge of election laws.


4. (U) Corruption: Bangladesh acceded to the UN
Convention Against Corruption. The CTG reconstituted the
Anti-Corruption Commission (ACC) with an activist Chairman.
Long-pending ACC regulations were adopted. Cases were
initiated against major political and business leaders with
notorious reputations for corruption. The Chairman, however,
complained of a lack of staff to do the job. The ADB is
reengaging to renew technical assistance and support.
Further amendments are in draft to strengthen the ACC and
rectify organizational weaknesses. Lesser officials in the
police and civil service were arrested after demanding bribes
for services. Anecdotal evidence suggests civil servants are
beginning to get the message, actually refusing proffered
bribes.


5. (U) Counter-terrorism: The Rapid Action Battalion with
support from the intelligence services continues to track,
investigate and arrest leaders and foot soldiers of Jamaat'ul
Mujahedin Bangladesh (JMB). The death sentences of the six
convicted leaders of the Shuria council were carried out in
late March. The CTG has announced its commitment to pursue
anyone who provided financial support or political protection
to the JMB.


6. (C) Rohingyas: After chronic neglect by the previous
government, the CTG is reengaging on the Rohingyas issue.
Interest was spurred by a personal visit to the camps by
Adviser Tapan Chowdhury, accompanied by UNHCR. Foreign
Affairs Adviser Iftekar Chowdhury reportedly will raise the
issue during a trip to Burma, while UNHCR sees sufficient
progress to warrant reengagement on repatriation discussions.


7. (U) Judicial Reform: The CTG has vowed to complete the
long-delayed separation of the lower courts from the
executive branch. Implementing rules were submitted to the
Supreme Court and returned for further revision, which the
government must complete by the end of May.


8. (SBU) Economy: The IMF and World Bank both report
continued macroeconomic stability and progress toward
reforms, while cautioning that economic growth will be lower
for FY 2007. Privatization of the first of four nationalized
commercial banks (a key IMF goal) is nearly complete.
Remittances are expected to cross $5 billion for the fiscal
year ending June 30.


9. (U) Tax Enforcement: The National Board of Revenue has
stepped up tax enforcement with more targeted investigations
against individuals and businesses with significant
discrepancies between reported income and known assets and
expenditures. The revenue impact is moderate but voluntary
compliance has improved. Increased attention to customs
fraud led to widespread abandonment of luxury vehicles and
limited improvement in compliance.


10. (U) Energy: The CTG has raised electricity and fuel
prices to reduce government subsidies, although further
increases are needed, if politically difficult. The CTG
opened discussions with India on cross-border power
transmission. Major markets now close at 7 pm to conserve
electricity and minimize rolling blackouts. The government
has prepared a comprehensive energy plan (currently before
the Council of Advisers) for its coal, natural gas and power
sectors to address long-term energy needs. The CTG is
renewing negotiations with US and other investors for large
power plants and is retendering for small, independent power
producers (10-40 MW plants).


11. (U) Chittagong Port: The country's primary port is
fully operational. The government completed a previously
blocked privatization of port management and added shifts to
increase capacity. Ship turnaround is near optimal
operational limits. Addressing corruption and ending
inefficiencies reduced total cargo handling costs by more
than 50%.

Spotty Performance
--------------


12. (C) Mishandling the Begums: The CTG's efforts to
isolate Khaleda Zia and Sheikh Hasina (supported by senior
party leadership) escalated from gentle persuasion (perhaps
contributing to Hasina's departure),through subtle pressure,
to thinly disguised coercion and a questionable legal ban on
Hasina's return. The stubbornness of the "two begums" has
confounded the government and pushed it into a public
relations quagmire that may yet unravel its plans for
political reform and has already led it on April 25 to
publicly announce Hasina's right to return to and Zia's
freedom to remain in Bangladesh.


13. (C) Advisers Overstretched: The constitutional
caretaker government structure was not designed to serve as a
fully functioning long-term interim government. The Chief
Adviser plus ten advisers structure is too thin at the top to
manage the government's nearly 50 ministries and
institutions. Institutional decision-making paralysis at the
end of the previous government meant advisers were quickly
overwhelmed addressing chronic and acute issues within their
portfolios. The CTG has yet to find a constitutional
solution to permit additional ministerial level appointments
to manage the day-to-day business of government.
Coordination within the government is uneven, with Advisers
sometimes contradicting one another in their public
statements.


14. (U) Election Timing: Despite progress planning for
elections, much work remains. See septel.


15. (C) In the "Crossfire": After the state of emergency
there was a 16% drop in the monthly average number of deaths
caused by law enforcement officials. Of the total monthly
average number of "crossfire" deaths, those attributed to the
Rapid Action Battalion stayed constant, the rate of police
involvement fell, but deaths caused by the military, which
assumed a law enforcement role in arresting people charged
with corruption and other crimes, more than doubled.


16. (C) Avian Influenza: Confronted unexpectedly with its
first avian influenza outbreak, the CTG was at first slow to
react but has since become more open and willing to accept
international advice and assistance. Coordination and
implementation within the government remain uneven.

17. (U) Slum Clearance; Zealous Regulatory Enforcement:
The CTG's early efforts to rein in "land grabbers" were
quickly marred by its decision to level slums and makeshift
shops on public lands and right-of-ways. Equally unpopular
was it's "bulldoze first, examine permits later" approach to
building code and zoning violations, which while popular when
targeted against chic shops in the wealthy diplomatic
quarter, quickly lost favor when applied to village markets.
Learning from its mistakes, the CTG has since adopted a more
reasoned approach to these issues.

Areas for Improvement
--------------


18. (U) State of Emergency: The January 11 State of
Emergency remains in effect providing the legal basis for
curtailing the full range of civil and political liberties.
Its duration is not constitutionally limited and the
government has given no indication when it might be lifted.
Amendments to rules implementing the State of Emergency were
applied retroactively in many instances.


19. (C) Political Activity Ban: The government's initial
ban on political demonstrations and other outdoor political
gatherings or protests was later expanded to include all
political activity. The ban has prevented the parties from
beginning the process of internal political reform and has
stifled consultations on election reforms and other issues,
although the Election Commission has maintained quiet contact
with the parties, which has enabled consultation and initial
agreement on proposed election rules. The ban may be lifted
or relaxed in May, according to the Chief Advisor and press
reports.


20. (C) Press Intimidation: The CTG has allowed the media
to continue to operate but has used varying degrees of
intimidation and outright restrictions under the authority of
emergency rule to mute or censor coverage critical of the
government. Reporters have "minders" who shadow their
movements and routinely call or SMS message the reporters
with "advice" on stories to report or suppress and the tone
of the coverage. Occasionally, the CTG bans coverage of
specific events, such as Hasina's statements in reaction to
the government's announced ban on her return to Bangladesh,
although press coverage critical of COAS Moeen's two March
speeches was allowed. (Comment: On April 25, the Chief
Advisor's Press Spokesman, Fahim Munaim (please protect),
told Ambassador the CTG informed COAS Moeen of their
objections to these practices and he advised the CTG it would
stop. Embassy will continue to monitor. End Comment.)


21. (C) Custodial Deaths: Civilian and military officials,
in response to USG and international pressure, initially
curbed "custodial deaths" and abusive treatment of detainees,
but subsequent incidents indicate a new rise in cases.
Investigations, when conducted, generally lack transparency
and credible results.


22. (C) Arrests & Detentions: Confusion and controversy
have surrounded the number of arrests since January 11, with
the CTG insisting the 130,000 plus arrests are consistent
with normal arrest rates and that 75 percent of the arrestees
have been released on bail or after adjudication while human
rights organizations assert the average daily arrest rate is
now at least one-third higher than normal. The Home
Secretary has said that the government is now executing

SIPDIS
arrest warrants stayed by the previous government for
political reasons.


23. (C) Questionable Due Process: The shear scope of
corruption and its penetration into senior political and
business elites tempted the CTG into dubious arrests.
Charges ranging from petty liquor law violations to "Al
Capone" style allegations of extortion and tax evasion were
filed against prominent figures to detain them while the
government investigates and frames the main event corruption
charges. Material witnesses have been held incommunicado or
threatened with charges to "encourage" their cooperation in
investigations.


24. (C) Judicial Complicity? Although lower courts have
overturned government limitations on bail rights, the Supreme
Court has repeatedly stayed the orders pending review.


25. (C) While constitutionally acting "in support of the
civilian government," the military retains significant
influence on key political decisions. Retired military
officers hold positions among the advisers, the
Anti-corruption Commission and the Election Commission.
Ninth Division Commander Maj. Gen. Masud Uddin Chowdhury is
the Chief Coordinator of the National Coordination Committee
on Combating Grave Offenses established to coordinate the
work of the regional and local joint task forces (themselves
composed of military and civilian elements) investigating
allegations of corruption, serious crimes and abuse of power.
At the CTG's request, the procurement offices of the
military are supporting efforts to select equipment and
standards for preparing the voter list and national identity
cards.


26. (C) The military actively recruited both Chief Advisor
Fakhruddin and most, if not all, of the Council of Advisors.
Active and retired military officers were involved in
negotiations to "persuade" Khaleda Zia to leave Bangladesh.
The military has courted Nobel laureate Dr. Mohammad Yunus to
enter politics and has quietly approached politicians from
both major parties to encourage support for political reform
and possible defections from their existing parties. COAS
Moeen's two public speeches in March fueled speculation about
his political ambitions, including rumors he denies that he
wants to succeed President Iajuddin when the President's term
expires in September. Other rumors, also denied by senior
military leaders, postulate a national unity government,
"king's party," national referendum, or, more darkly, a coup
or martial law. COAS Moeen, however, has stated to the
Ambassador that martial law will not occur while he leads the
Army.

Comment
--------------


27. (C) The international and donor communities have
engaged the CTG as it fulfills its pledge to return
Bangladesh to elected government as soon as possible. We
have also quietly (both publicly and privately) criticized
mistakes, disturbing trends and human rights violations, even
though sensitivity to foreign comment and perceived
interference remains high.
BUTENIS