SCENESCETTER FOR STAFFDEL GROVE'S VISIT TO

C O N F I D E N T I A L SECTION 01 OF 03 DHAKA 000016

SIPDIS

SIPDIS

DEPARTMENT FOR H

E.O. 12958: DECL: 01/06/2018
TAGS: EAID ECON PGOV PREL BG
SUBJECT: SCENESCETTER FOR STAFFDEL GROVE'S VISIT TO
BANGLADESH


Classified By: CDA a.i. Geeta Pasi, Reasons 1.4 (b) and (d)


1. (C) SUMMARY: Your visit comes at the one-year
anniversary of the Caretaker Government, which is struggling
to rehabilitate areas of the country devastated
by Cyclone Sidr and to address food security issues 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 and others in the international
community. 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. These disasters come at a critical
time for the Government, which has embarked on an ambitious
political reform agenda that is to culminate in national
elections by the end of next year.


2. (C) SUMMARY CONTINUED: Bangladeshis have embraced
Caretaker Government 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. (SBU) 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 Government of Bangladesh (GOB)
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. (C) 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.

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THE POLITICAL SCENE

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6. (C) The Caretaker Government (CTG) came to power in
January 2007 as political violence was spinning out of
control in the run-up to scheduled elections later that
month. The CTG, made up of 10 non-political advisers and
strongly supported by the military, imposed a state of
emergency 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. On December 26, Education and
Cultural Affairs Adviser Ayub Quadri took responsibility for
the loss of two priceless artifacts en route to an exhibition
in Paris and became the first of the CTG,s 10 advisers to
resign. Since then, rumors of a broader, long-anticipated
Cabinet shuffle have intensified.


8. (C) In the midst of this political jockeying, 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.

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ECONOMIC CHALLENGES
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9. (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.
Bangladeshis are excited about the potential for the proposed
New Partnership for Development Act to provide a boost to the
economy by providing duty-free access to the U.S. market for
ready-made garments, which is the country's main export.
Bangladesh remains interested in receiving Millenium
Challenge Corporation assistance but does not yet meet all of
the eligibility requirements.

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FIGHTING TERRORISM
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10. (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.

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YOUR VISIT
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11. (C) Your visit to Bangladesh will highlight the
importance Congress places on bilateral relations. It will
underscore Congress' support for Bangladesh as it works to
respond to the cyclone's devastation and to keep the country
on the path to free and fair elections by the end of 2008.
Your visit will provide an opportunity to assess the
effectiveness of several ongoing USG-funded development
programs and the need for additional programs to help
Bangladesh recover from the cyclone and prepare for future
natural disasters. Your meetings with senior Bangladeshi
officials also will provide forums to stress the importance
of bilateral cooperation in combating terrorism and the
restoration of democracy.
Pasi