BANGLADESH SCENESETTER FOR PDAS CAMP

C O N F I D E N T I A L SECTION 01 OF 03 DHAKA 000116

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/23/2018
TAGS: EAID ECON PGOV PREL BG
SUBJECT: BANGLADESH SCENESETTER FOR PDAS CAMP

DHAKA 00000116 001.2 OF 003


Classified By: A/DCM Danilowicz, Reasons 1.4 (b) and (d)


1. (C) SUMMARY: Your visit comes just after a major
reshuffling of the Caretaker Government (CTG) that coincided
with its one-year anniversary. The reshuffle in mid-January
was designed to inject new life into a Government struggling
to rehabilitate areas of the country devastated by Cyclone
Sidr and to keep the lid on inflation while preparing for
nationwide elections by the end of 2008. Bangladesh largely
met the emergency needs of victims of the November 15
cyclone, due in part to assistance from USAID and the U.S.
Pacific Command. The longer-term task of reconstruction will
be particularly daunting given that Bangladesh is an
impoverished country that already was hit by serious monsoon
flooding earlier in 2007.


2. (C) SUMMARY CONTINUED: Bangladeshis have embraced CTG
reforms to address chronic political corruption and violence.
Many high-powered politicians and businessmen have been
arrested on graft allegations. Public support for the
Government, however, has been weakened by spiraling
inflation, which crop damage from the cyclone has
exacerbated. Politics is in a heightened state of flux, with
two former prime ministers among those in jail facing trial
on corruption charges and no politicians of similar stature
coming to the fore. Behind the scenes, the army actively
supports the Caretaker Government and appears to share our
interest in seeing it succeed. We continue to emphasize the
need for the Government to adhere to its election roadmap and
to international norms of justice and human rights, while
also addressing the basic needs of Bangladesh's population.
We also continue to encourage dialogue among the Caretaker
Government, political parties and the military to reach a
consensus political vision for the way forward. END SUMMARY.

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CYCLONE RELIEF
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3. (U) Cyclone Sidr slammed into the southern coast of
Bangladesh on November 15, affecting the lives of 8.9 million
people and resulting in as much as USD 2.3 billion in
economic damage. The CTG estimates that as many as 3,400
people died; loss of life was mitigated by strengthened
disaster preparation, a focus of USAID's efforts here.
(NOTE: Cyclones in Bangladesh of similar strength left
500,000 and 100,000 dead in 1970 and 1991, respectively. END
NOTE.) Those who survived need food, water, shelter and a
restoration of their livelihoods. The cyclone damaged or
destroyed over 1.5 million homes and more than 640,000
hectares of crops. About 350,000 farm animals were lost, and
95 percent of the fish and shrimp ponds that are the basis of
the nation's lucrative aquaculture industry were damaged.


4. (U) The U.S. government, including the U.S. military, has
played a key role in assisting Bangladesh with disaster
relief and management before, during and after Cyclone Sidr.
In the past, USAID provided disaster management assistance to
Bangladesh that was important for warning residents about the
cyclone's approach and sheltering people when the cyclone
made landfall. Immediately after the cyclone struck, the USG
provided USD 19.5 million in emergency relief as well as
desperately needed airlift to deliver food, water and
clothing to remote areas. Operation Sea Angel II was a
success, both in its mission to provide humanitarian
assistance and disaster relief and in highlighting strong
U.S. relations with a moderate Muslim nation.


5. (C) Now that the immediate crisis has passed we are
focused on longer-term reconstruction and rehabilitation.
USAID is proposing the USG continue its cyclone relief
efforts with an additional USD 115 million over the next
three years to help rebuild agriculture and aquaculture
industries, reconstruct rural electrification networks, and
mitigate future disasters. We also are recommending an
allotment of 100,000 metric tons of food to assist Bangladesh
with food security; the nation's food stockpiles could be
depleted by spring as Bangladesh struggles to meet the
medium-term needs of cyclone victims. Additional USG
assistance for reconstruction and rehabilitation was the
focus of discussions with the GOB during recent visits by
Assistant USAID Administrator Mark Ward and a Senate
Appropriations Staff Delegation led by Paul Grove. The GOB
is likely to focus on this topic during your visit as well.

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THE POLITICAL SCENE
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6. (C) The Caretaker Government (CTG) came to power in
January 2007, the day after a State of Emergency was declared
to quell political violence that was spinning out of control
in the run-up to parliamentary elections. The CTG, made up of
11 non-political advisers and strongly supported by the
military, cancelled the elections and began cracking down on
endemic political corruption and violence. The crackdown
initially won broad public support, but frustration with the
CTG spilled onto the streets in late August when a dispute at
Dhaka University between students and soldiers became a
rallying point for thousands of Bangladeshis disaffected by
inflation, other economic woes and restrictions on political
activity. The CTG stopped the protests by imposing a curfew
backed up by a show of force from the army. Government
leaders acknowledged privately to us and others the need to
stick to the elections roadmap, to open up political
discourse, and to communicate more effectively with the
public.


7. (C) Bangladeshis welcomed in September an easing of the
ban on politics and the initiation of formal dialogue between
the Election Commission and the parties on political reform.
The relaxation of the ban threw internal party disputes into
sharp relief. The most visible struggle is within the
Bangladesh Nationalist Party (BNP),which governed the
country from 2001 to 2006 under former Prime Minister Khaleda
Zia. The Awami League, the other major party, has also
experienced internal strife between reformers and loyalists
to former Prime Minister Sheikh Hasina, but both sides accept
her hand-picked protege as acting party president while she
is in jail. Army Chief General Moeen Uddin Ahmed repeatedly
has stated that he has no political ambitions, even as he
assumes by default a higher public profile than the Chief
Adviser, who is the top official in the CTG.


8. (C) The CTG marked its first anniversary with a broad
shake-up. Five widely respect Bangladesdhis took the place of
advisers who resigned under pressure after a series of
missteps contributed to the Government's eroding popularity.
Five special assistants to the Chief Adviser also have been
named to help the overworked Council manage its ambitious
agenda. In a televised address, the Chief Adviser announced
plans to hold talks with political parties to ensure broad
political reforms leading to national elections this year
stay on track. The new-look government has moved to defuse
smoldering tension on university campuses by granting
clemency to several professors and students convicted of
charges stemming from the violent demonstrations in August,
but dissatisfaction remains.


9. (C) In the midst of the political jockeying and government
shake-up, voter registration continues in preparation for
national elections scheduled by December 2008. While the
mechanics of holding elections seem to be largely on track,
there is still much debate about an "exit strategy" for the
CTG and the military, who want to ensure a newly elected
government maintains reforms and refrains from settling
scores. They fear retribution from a resurgent political
class that has been the main target of the anti-corruption
campaign. The Caretaker Government has announced it plans to
hold dialogues with the political parties after the Election
Commission completes its consultations with the parties.

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ECONOMIC CHALLENGES
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10. (C) Cyclone Sidr exacerbated worsening economic trends in
Bangladesh. Inflation was becoming a serious problem even
before the cyclone destroyed crops, and investment was
slowing as businessmen assessed the effects of the
anti-corruption drive and the Caretaker Government's
implementation capacity. High world prices for food and fuel
hit Bangladesh hard in the wake of severe monsoonal flooding
in the summer. Cyclone reconstruction is yet another
enormous economic burden the current government must
shoulder, albeit with assistance from the international
community. The Asian Development Bank
estimates GDP growth in Bangladesh this year will fall below
6.0 percent from last year's growth of 6.5 percent.

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FIGHTING TERRORISM
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11. (C) Although Bangladesh is a moderate Muslim-majority
nation, its porous borders make it a potential transit point
and safe-haven for terrorists. The USG funds many programs in
Bangladesh to counter terrorism, including a wide range of

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training under the Anti-Terrorist Assistance program
coordinated by the State Department. USAID and Public Affairs
Section programs also address root causes of extremism
through outreach to leaders of influence, including religious
figures, and to madrassas. Human rights concerns have
prevented the USG from engaging the paramilitary Rapid Action
Batallion (RAB),which is the lead counterterrorism force in
Bangladesh. RAB's record has improved under the Caretaker
Government and some international groups are providing human
rights training to build on that positive trend.

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YOUR VISIT
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12. (C) You will be the highest ranking USG official to
visit Bangladesh since the State of Emergency was declared in
January 2007, making your trip extremely important and likely
to garner much media attention. In your meetings with
politicans, journalists and government and military leaders
you will have ample opportunity to underscore USG support for
the Caretaker Government as it works to respond to the
cyclone's devastation and to hold free and fair elections by
the end of 2008. You should urge political parties to act
responsibly to make the return to democracy a success. You
also can emphasize the importance of continued bilateral
cooperation in combating terrorism and extremism.
Rollins