BANGLADESH SCENESETTER FOR ASSISTANT SECRETARY

S E C R E T SECTION 01 OF 03 DHAKA 000555 NOFORN SIPDIS FOR A/S BLAKE FROM THE AMBASSADOR E.O. 12958: DECL: 05/27/2019 TAGS: PGOV PTER PREL KGOV BG SUBJECT: BANGLADESH SCENESETTER FOR ASSISTANT SECRETARY BLAKE REF: A. DHAKA 535 ¶B. DHAKA 534 Classified By: Ambassador James F. Moriarty. Reasons: 1.4 (b) and (d) -------------- SUMMARY -------------- ¶1. (C) Bob, I am glad you are headed our way. We look forward to welcoming you to Bangladesh, a moderate Muslim-majority country of nearly 150 million people that is friendly to the United States. This is a surprisingly hopeful place despite the daunting problems it faces: recurring natural disasters; poverty; overpopulation; porous borders attractive to terrorists; and a political system that features two dominant parties whose leaders, Prime Minister Sheikh Hasina of the Awami League and Bangladesh Nationalist Party Chairwoman Khaleda Zia, revel in petty partisanship. ¶2. (S/NF) Yet that's only part of the story. Bangladesh has made huge progress in a number of areas, and is clearly no longer the "international basket case" once described by a former Secretary of State. It is now a thriving democracy that in December 2008 held its freest, fairest and most credible Parliamentary elections since its independence in ¶1971. Since taking office in January 2009, Hasina has taken a strong public stance against Islamic extremism and backed it up with action, including the sharing of vital intelligence from captured terrorists of the Pakistani group responsible for the November 2008 attack on Mumbai. And the economy has shown suprising resiliency to the global recession and looks set to continue the record of solid growth since 1991. ¶3. (C) This fragile balance sheet of positives and negatives underscores the absolute importance of U.S. Government engagement to help Bangladesh develop its democracy, its economy and its counterterrorism capabilities. The denial of space to extremists in Bangladesh will help our overall efforts to remove the terrorist scourge from South Asia. The promotion of democracy and economic development will help ensure Bangladesh remains a moderate voice on the global stage sympathetic to President Obama's efforts to reach out to the Muslim world. -------------- -------------- BUILDING DEMOCRACY: THE GOOD, THE BAD AND THE UGLY -------------- -------------- ¶4. (SBU) Bangladesh, the seventh-most populous country in the world, returned to democracy with Parliamentary elections in December 2008 after two years of an unelected Caretaker Government (CTG). The CTG had initiated several reforms to the country's violence- and corruption-plagued political system. Among its successes was creation of a new, credible voter list which included photo identification of more than 80 million Bangladeshis. The Caretaker Government also prevented intimidation in the run-up to the election and ensured polling day was peaceful; international and domestic monitors declared the election free, fair and credible. ¶5. (SBU) Sheikh Hasina's Awami League won at least in part due to a positive message promising an end to the hyper-partisanship of Bangladesh's traditional "winner-take-all" politics. She filled her Cabinet with many new faces, pushing from center stage many of the Awami League politicians closely associated with the dysfunctional politics of the past. The media, which faced constant threats from military censors during the Caretaker Government, has blossomed in recent months, freely criticizing many of the new Government's policies. ¶6. (C) Still, Hasina has not yet risen above the vindictiveness and petty politics that have proven so debilitating to Bangladesh's democracy. A fight between the Awami League and the opposition Bangladesh Nationalist Party (BNP) over the seating chart for Parliament prompted an opposition boycott of the legislative body's first weeks. The BNP also reacted with fury to Hasina's efforts to evict the party's leader, Khaleda Zia, from her home on the Dhaka Cantonment grounds. (Note: On May 27, the High Court stayed the eviction notice for three months. End note.) A tearful personal visit by Zia to Hasina when her estranged husband died in early May raised some hopes of a detente between the two ladies, and Hasina reportedly is looking to establish a back channel of communications with Khaleda Zia. (reftel A) DHAKA 00000555 002 OF 003 ¶7. (C) The Awami League-dominated Parliament modified an ordinance approved by the Caretaker Government to establish elected upazilla (county) governments. The ordinance was part of an effort to decentralize power and make government less corrupt and more efficent. The modifications require upazilla chairmen to follow the advice provided by members of Parliament on development issues. While the Minister for Local Government said he expected local officials would ignore the advice since the law did not include sanctions, upazilla chairmen have denounced the modifications as undemocratic and an affront to their authority. ¶8. (S/NF) Both the fragility and resiliency of Bangladesh's democracy were underscored by the mutiny of Bangladesh Rifles (BDR) border guards on February 25-26. In the first hours of the rebellion, the border guards killed 57 army officers seconded to the BDR, prompting howls of outrage from army officers who felt the government should have moved more quickly to quash the mutiny. The Prime Minister faced hostile and rude questioning at a tense meeting with hundreds of officers on March 1, but the encounter seems to have had a partially cathartic effect. As events unfolded Hasina was bouyed by strong public support; many newspapers, for example, praised her for handling the event with poise and preventing what could have been a much bigger bloodbath. While grumbling continues among mid-level army officers, we have seen nothing to indicate a coup might be in the offing. -------------- SECURITY: THE GOOD, THE BAD AND THE UGLY -------------- ¶9. (S/NF) Soon after taking office, Prime Minister Hasina proposed creating a regional task force on security. In one clear sign her Government was paying more than lip service to fighting terrorism, its intelligence agencies arrested, and shared information with the U.S. and United Kingdom derived from debriefings of, members of the Pakistan-based terror group Lashkar-e-Tayyiba (LT) operating in Bangladesh. Hasina also has signaled a strong interest in attacking the root causes of extremism. For example, she has made reform of Islamic schools known as madrassas a priority. Specifically, she wants to bring thousands of heretofore independent madrassas under government regulation to ensure they do not disseminate extremist ideologies and their curriculum prepares students to enter the mainstream economy. ¶10. (SBU) Still, the border guard mutiny underscored the need for comprehensive security sector reform, particularly in the relationship between the civilian government and military, for Bangladesh to answer effectively the challenge of terrorism. To push reform forward, the U.S. Department of Defense Asian Pacific Center for Security Studies (APCSS) is organizing a workshop on how best to ensure the primacy of civiliaQontrol over the military and on developing national security mechanisms. At the same time, Embassy Dhaka also has secured $100,000 from the Department of State's Office of the Coordinator fQCounterterroriQfor local workshops to discuss a regional approach to security. This Track Two program will include participants from India and other South Asian neighbors and should stimulate discussion on how best to tackle border management, terrorism finance and related regional security issues. ¶11. (C) The Embassy also plans to help Bangladesh overcome weaknesses in its law enforcement agencies that hinder the fight against terrorism. Using 1207 funds, the Mission soon will launch a community policing program aimed at promoting better relations between police and the communities they serve in northwest Bangladesh, long a breeding ground for Islamic extremists. The Mission also is working to make Bangladesh's Rapid Action Batallion (RAB) a more transparent and accountable organization so it can qualify for U.S. Government counterterrorism training. Two U.S. Marshals are to arrive in June to review the RAB's internal systems of accountability and to suggest improvements. Recent arrests of members of the domestic terrorist group Jama'atul Mujahideen Bangladesh -- including its most wanted explosives expert -- attest to the RAB's value as a counterterrorism partner. -------------- DEVELOPMENT: THE GOOD, THE BAD AND THE UGLY -------------- ¶12. (U) Since 1991, Bangladesh's gross domestic product has grown on average more than 5 percent per year. Many social indicators are better than those in India, and average life DHAKA 00000555 003 OF 003 expectancy has increased to 64 years for both men and women, from 38 years back in the late 1970s. Bangladesh has dodged the worst effects of the current global economic crisis, at least for now. Economists predict Bangladesh's economy will grow between 5 percent and 6 percent in 2009, down slightly from the government's target of 6.5 percent growth. Compared to most other nations, this slowing of growth is modest. Thus far, Bangladesh's exports, mostly apparel, and remittances continue to grow, albeit at slower rates than previously. If the global economic downturn is prolonged, Bangladesh's economy could be hit harder and threaten the country's macroeconomic fundamentals, which remain stable for now. ¶13. (C) Even if Bangladesh weathers the global downturn, it still must address the challenges it has faced for the last decade and more: chronic power shortages, decaying transport infrastructure, a weak education system, a fragile financial sector, poor governance and low government revenues, particularly taxes. If the Government can tackle even some of these problems, growth could rise to 7 percent to 8 percent annually, a rate needed to truly pull Bangladesh out of poverty. Donors and investors are standing by to help; U.S. Government assistance to Bangladesh this year will exceed $150 million. ¶14. (C) U.S. investors, particularly in power and energy, are eager to do business here. Government of Bangladesh leaders, including the Prime Minister, say they are committed to creating a favorable business environment that will strengthen the private sector and attract foreign investment. Recent actions, however, have raised questions about this commitment. Attempts to force foreign shipping companies, such as U.S. firm APL, to sell a share of their Bangladesh operations to local interests would send a bad signal to investors if successful. So too would a draft industrial policy that calls for a slowing of privatization and a re-opening of inefficient state-owned enterprises. ¶15. (SBU) Meanwhile, natural disasters continue to bedevil Bangladesh, the most recent misery coming from Cyclonic Storm Alia that swept through the south on May 25 and left at least 167 people dead. Media reported on May 31 that thousands of people remained without drinking water and food as tidal surges made relief efforts to remote regions particularly difficult. On May 28, I declared a disaster in Bangladesh and requested $100,000 in emergency funds for shelter, water, food and other relief asistance. (reftel B) USAID is diverting another $195,000 to supply emergency relief items such as blankets, clothing and survival kits. -------------- COMMENT: ADVANCING U.S. AGENDA -------------- ¶16. (C) Your talks with Bangladeshi officials will provide a critical opportunity to advance U.S. Government interests not only here but throughout the region. The Bangladeshis are eager to meet you and will listen attentively to your message as the clearest indicator to date as to where U.S.-Bangladeshi relations will be heading. Thus, you might want to push hard for democratic reform, particularly the need to rise above political pettiness so that Bangladesh can overcome its myriad problems. Your encouragement of greater law enforcement accountability and of security sector reform will support efforts to deny space to terrorists. Finally, your urging that Bangladesh create a positive investment environment would brighten prospects for the sustainable development needed to escape endemic poverty. Embassy Dhaka looks forward to a visit that gives our critical engagement with Bangladesh a hefty push in the right direction. MORIARTY