BANGLADESH--NOT FOR THE FAINT OF HEART

C O N F I D E N T I A L SECTION 01 OF 05 DHAKA 000242

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/22/2018
TAGS: PGOV PREL PINR ASEC PTER ECON BG
SUBJECT: BANGLADESH--NOT FOR THE FAINT OF HEART

Classified By: CDA A.I. GEETA PASI, REASONS 1.4(B) AND (D)


1. (C) Summary: The goal of free, fair, and fully
participatory elections in Bangladesh by the end of 2008
remains achievable, but numerous potential obstacles stand in
the way of realizing that objective, with some key observers
starting to hedge their bets. With less than a year
remaining before elections, there needs to be a concerted
effort on all sides to reach agreement on a political exit
strategy for the Caretaker Government and the Army. The fate
of the two imprisoned former Prime Ministers continues to
loom large and remains the most intractable problem facing
the regime. While the USG and the international community
can help facilitate the dialogue among all the players
(political parties, civil society, the Caretaker Government,
the Army, etc.),in the end success (or failure) will depend
on the commitment of Bangladeshis to the goals of January 11.
End Summary

Crystal Ball Gazing
===================

2.(C) In a best case scenario, by the end of 2008 Bangladesh
will hold parliamentary elections judged to be free, fair,
and fully participatory. Soon thereafter, the Caretaker
Government (CTG) will hand over power to an elected
government that reflects the will of the Bangladeshi people.
The Bangladesh Army will end its day to day involvement in
managing the work of government and return to focusing on
primary missions such as national defense and international
peacekeeping. The newly-elected government will ratify the
actions of the CTG, lift any remaining provisions of
emergency rule, restore proper civil-military balance, and
continue to implement the reform process begun after January

11. A new President and Prime Minister will be appointed and
begin to restore dignity and credibility to those offices.
Business confidence will rebound, with the new government
engaging in constructive dialogue with development partners
to improve the lives of Bangladesh's most vulnerable
citizens. Political parties will continue internal reforms
and a loyal opposition will emerge within the parliament,
which will become the recognized forum for debate over
national issues. Hartals and violent street demonstrations
will be a thing of the past. In retrospect, the sacrifices of
the previous two years will be seen to have been worthwhile
and Bangladeshi citizens will chart their course to a
brighter future. There will be no return to the status quo
before January 11, 2007.


3. (C) Easier said than done. While the above &best case8
scenario is plausible, this future is by no means certain.
In recent weeks, some key local observers as well as
outspoken representatives of civil society have begun to
discount the prospects of the CTG fulfilling its mandate, in
particular a successful return to democratically elected
government by the end of 2008, claiming more time is needed
to implement programs and reform institutions. It is clear
that there are a significant number of potential obstacles
that must be overcome in order to ensure a positive exit for
the CTG and its supporters. This cable will outline some of
the most pressing issues and conclude with some
recommendations for how the USG and international community
can help influence events in the coming months.

Electoral Roadmap On Track for Now
==================================


4. (C) The Election Commission (EC) continues to make
important progress in overseeing the registration of
Bangladesh,s estimated 90 million eligible voters. As of
today, approximately 45% of voter registration has been
completed. The army, which is conducting the registration,
believes it can complete this task on schedule (by June/July)
in order to allow for appropriate review and correction of
the lists and elections to be held in the final quarter of

2007. That is the good news.


4. (C) At the same time, the capacity of the EC to facilitate
positive reform and lasting change is limited. The EC's
attempts to catalyze internal political party reforms have
been stymied. On February 24 the EC begins the second round
of consultations with the parties on the new electoral laws,
even before it meets with the Bangladesh Nationalist Party
(currently tied up in a court case over who represents the
now-splintered party). The EC has also hinted that it may
relax the requirements for party registration to benefit
smaller parties, even as it prepares to propose other

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institutional changes such as establishment of a bicameral
legislature and amendments to parliamentary procedures. It is
unclear which reforms will be implemented before elections,
and which will be left for the next parliament to decide.
Elections in municipalities, including Dhaka are currently
slated for April/May. These elections could serve as a
useful "dry run" and help build confidence in the electoral
process. At the same time, there are questions whether or
not elections can be held under a State of Emergency, with
some speculating that a decision to lift restrictions could
precipitate violence. Some have gone so far as to argue that
violence surrounding municipal elections could be used as a
pretext for canceling national elections.

BNP'S Future Looks Dim
======================


6. (C) While the Awami League has remained outwardly united
and able to present a more or less common front as it
prepares for the next round of dialogue with the EC, the
Bangladesh Nationalist Party (BNP) is in disarray. The
GOB,s efforts to promote reform within the BNP and sideline
former Prime Minister Zia by encouraging reformers to wrest
control of the party from the Zia clan have backfired. The
reformist group, led by former Finance Minister Saifur
Rahman, is demoralized and bitter about how it was misled by
representatives from the Directorate General of Forces
Intelligence (DGFI),the behind the scenes broker on
political issues. Khaleda Zia loyalists believe the Supreme
Court will soon rule in their favor and annul the results of
an October 29 meeting which appointed Saifur Rahman as acting
Chairman of the Party. While there is now much discussion
within BNP ranks of &unity8 it is unclear whether the two
factions will be able to overcome their differences.
Meanwhile, BNP coalition partner the Jamaat Islami Bangladesh
is under pressure by those calling for trials of war
criminals, which could possibly sideline senior party
members. A greater threat is that the Jamaat could be barred
from registering as a party, as has been demanded by a vocal
minority of former freedom fighters. (See septel on the
Jamaat's problems).

Government of National Unity: Still Plan B
===========================================


7. (C) The establishment of a &Government of National
Unity8 is a notion that predates the January 11 declaration
of a state of emergency. Most recently, discussion has
focused on this option as a possible substitute for elections
and a mechanism for excluding the two former Prime Ministers
from office. Politicians from all parties report being
approached by DGFI and enticed (or coerced) into agreeing to
participate in such a Government. There have been few takers
from the major parties, however, since most politicians
realize that without their party's backing they have little
political viability as individuals. Those who are most
enthusiastic about the proposed GNU have been roundly
dismissed as individuals likely to be "selected" but who
cannot in their own right be "elected." While there have
been efforts by DGFI to test the waters regarding a
"Government of National Unity" its architects realize that
this is a potential solution fraught with problems. At best,
this initiative seems to be a fallback option should it prove
impossible to hold elections can guarantee an outcome
acceptable to the Army. One rumored version of this approach
is that DGFI will attempt to forge a "national front" of
small parties to contest elections and serve as their proxies
in a new government.

What does the Army Want?
========================


8. (C) Uncertainty and speculation remain rife regarding
the true intentions of the Army and the Chief of Army Staff
General Moeen Uddin Ahmed. In public and private Moeen
consistently states that he has no political ambitions. At
the same time, he has also said repeatedly that the political
situation will not be allowed to revert to a status quo
pre-1/11, and he has been openly critical of the past
performance of politicians. Recent headlines surrounding the
launch of a book comprised of Moeen's speeches have focused
on his call for Bangladesh to practice its "own form of
democracy." Most observers agree that there is little
incentive for the army as an institution to physically seize
political power, and overall an anti-coup mentality exists
within the military. Many in the military view threats to be
excluded from participation in PKOs were they to seize power

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as hollow, given the international community's reaction to
coups in Pakistan, Fiji, and Thailand. At the same time,
Bangladesh's army has grown accustomed to the international
prestige gained, as well as the financial benefits earned,
from participation in PKOs and is not likely to take actions
that would risk future participation. As a result, it is
probably more important for Bangladesh army officials to
realize that it would be practically impossible to continue
to send significant numbers of soldiers to PKO missions if
the bulk of the 150,000 man army had to be devoted to
domestic missions.


9. (C) It is almost certain that General Moeen will seek an
extension as Army Chief before his three year appointment
expires in June. When he does, many will be quick to draw
parallels to former military dictators Ziaur Rahman and
Hussein Muhammad Ershad, but there will likely be little
surprise or opposition to Moeen extending his term. What
would obviously be much more controversial would be a
decision by Moeen to seek the Presidency, in particular while
in uniform. The idea continues to be discussed among Dhaka's
chatterati, and apparently even on the cantonment. At the
same time, there is also discussion of the army orchestrating
selection of the next President from the ranks of the
civilian politicians. Most observers also expect to see the
establishment of a "National Security Council" intended to
institutionalize an Army role in national decision making.
Accompanying this would likely be an adjustment of the
relative power of the President and Prime Minister to restore
some balance of power between the two.


10. (C) There are continuing periodic reports of friction
between Moeen and the other architects of the 1/11 state of
emergency, particularly other senior officers. It appears
that this small group is under increasing pressure to
demonstrate to subordinates that the sacrifices of the past
year will prove to be worthwhile. At the senior level of the
army at large, opinion may be divided on next steps. Moeen
clearly has the most to lose and needs to deliver both to his
senior officers as well as to the rank and file. Moeen,s
ongoing visit to India will fuel speculation from within the
military as well as the rest of the conspiracy-prone
population that India controls, or is trying to control, the
Army Chief.

Minus Two, Plus Two
===================


11. (C) By far, the most vexing question for Bangladesh's
future is what to do about the two former Prime Ministers.
While the ideal outcome might be some type of &Sonia
Gandhi8 solution whereby the two accept a largely ceremonial
role in the future, it has become apparent that this cannot
be imposed on either from outside. Rather, they must be
convinced that it is in their best interest to accept a deal
that excludes them from office (either national or party) in
exchange for freedom and the ability to exert influence from
behind the scenes. Complicating the situation for Begum Zia
is the question of the fates of her two sons, both of whom
are currently behind bars awaiting charges. There are
(albeit at times overstated) health concerns with both Sheikh
Hasina and Begum Zia,s two sons, and to a lesser extent
Begum Zia herself.


12. (C) The fate of the two Begums, as well as others
detained as part of the CTG,s anti-corruption drive, could
hinge on a pending decision by the Supreme Court on a
challenge by Sheikh Hasina,s lawyers to the Emergency Power
Rules. While there have been conflicting precedents at the
High Court level, the Appellate Division must now rule on
whether the EPR are unconstitutional because they allow for
ex-post facto punishment for crimes committed before January

11. The ruling in this case will also place renewed scrutiny
on the independence of the judiciary. Most observers believe
the court will uphold the CTG's position on the EPR.


13. (C) Some believe time is on the side of the two Begums
and predict there will be increasing pressure on the
government to release them as elections draw closer. There
are conflicting reports regarding negotiations that have
taken place between the two leaders and the CTG and the
commitment of both sides to engage in serious talks to avert
a crisis. All agree, however, that the two former Prime
Ministers still enjoy widespread popularity within their
parties and in the population at large. Given this, the most
viable option for them may be to try to outlast the CTG and
its supporters.

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Political Dialogue About to Begin
=================================


14. (C) In response to calls from the political parties and
the international community, the CTG is inching towards
initiating a dialogue with the parties on the country,s
political future. We have been told that the CTG will likely
appoint an individual, or group of individuals, to conduct
this dialogue on its behalf. The dialogue will likely
include representatives of civil society, as well as
politicians, and will focus on a common set of principles to
guide the country,s political evolution (such as Dr. Kamal
Hossain's proposed "Charter for National Unity.") While a
positive step, this dialogue will likely not be sufficient
for resolving the numerous outstanding issues standing in the
way of elections (most notably the fate of the two former
Prime Ministers). Also, to the dismay of the parties, the
Army will likely not play a direct role in the dialogue,
leading some to question its importance (as the Army is
viewed as the power behind the throne) as well as the
generals' true intentions.

Possible External Shocks Abound
===============================


15. (C) If the above political challenges were not enough,
the CTG could still be rocked by external shocks such as
renewed violence on universities or in the garment industry,
or a crisis over food supply or prices. Headlines continue
to be dominated by reports of increased cost of living and
growing misery for Bangladesh,s middle and lower classes.
On top of this, with the memories of last year,s floods and
cyclone, coupled with the recent avian influenza outbreaks,
the government is getting a reputation of being &unlucky8
in the eyes of superstitious Bangladeshi citizens. If the
army has to be called upon to provide significant support to
efforts to contain AI or food riots, its capacity to complete
voter registration on schedule may be jeopardized.

Business Community Frustrated
=============================


16. (C) There is considerable frustration in the business
community about government inertia. Businessmen claim the
CTG's reform efforts are incomplete, stalled, or at best
moving very slowly, including regulatory reform efforts. The
CTG had an opportunity to reenergize itself with the cabinet
shake up in January, but the new Advisers have not yet shown
themselves to be more effective than their predecessors
(septel will report on the CDA a.i.'s initial meetings with
the new Advisers). Lack of implementation of reforms is only
going to worsen in the coming year, as civil servants keep
their heads down in an attempt to avoid possible retaliation
by a future government. Business people and economists agree
decisive action is needed to keep the CTG's institutional
reforms going and to help boost business confidence, but most
predict the coming year will be one marked by paralysis. A
common refrain is that a clearly defined exit strategy that
has political party buy-in is the only way to combat
government inertia and bolster investor confidence.

Comment: Role for the USG And International Community
============================================= ========


17. (C) One of the most pressing problems for the CTG and the
Army is the degree of uncertainty surrounding many of the
most vital components of the "exit strategy." The confusion
is exacerbated by limited CTG capacity, lack of confidence in
the political system, as well as a lack of communication and
trust between the principal actors, most notably the
political parties, the Army and the CTG. While much ink is
spilled in the press with the results of seminars, press
conferences, and speeches, there is very little direct
communication. A role that the USG can play is to facilitate
dialogue between all sides and help to keep all focused on
the concrete steps needed to create an environment conducive
to holding elections. In this regard, recent high level
visits by USAID/ANE's Mark Ward, and State/SCA PDAS Don Camp
were useful in keeping the focus on the issues that need to
be resolved. We also should think ahead to the ways in which
the USG and the international community can build confidence
between the parties and help "guarantee" a political solution
while resisting the constant drumbeat of calls for the USG to
get directly involved in mediating between the parties. This
delicate balancing act will be increasingly critical as
elections approach. Finally, our assistance programs,

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particularly those targeted at cyclone reconstruction, food
security, and AI prevention, can help cushion the potential
external shocks. In sum, as the year progresses, Bangladesh
will continue to be a difficult place for the faint of heart.
While we can help promote an outcome in the best interests
of Bangladesh and the international community, in the end,
Bangladeshis themselves hold the key to determining their
future.
Pasi