VZCZCXRO9870
RR RUEHCI
DE RUEHKA #5515/01 2430648
ZNR UUUUU ZZH
R 310648Z AUG 06
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 1206
INFO RUEHKT/AMEMBASSY KATHMANDU 8664
RUEHNE/AMEMBASSY NEW DELHI 9299
RUEHLM/AMEMBASSY COLOMBO 7546
RUEHHI/AMEMBASSY HANOI 0130
RUEHKL/AMEMBASSY KUALA LUMPUR 0263
RUEHCI/AMCONSUL CALCUTTA

UNCLAS SECTION 01 OF 02 DHAKA 005515 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EIN ELAB ETRD EIND BG
SUBJECT: EXPORT ZONE CHAIRMAN OUTLINES PLANS FOR DEALING 
WITH WORKER UNREST AND GOALS FOR FUTURE 
 
REF: A. A. DHAKA 4412 
 
     ¶B. B. DHAKA 5061 
 
¶1. (U)  Summary.  Economic officers visiting the Bangladesh 
Export Processing Zone Authority (BEPZA) on 27 August were 
surprised to find themselves meeting with BEPZA Executive 
Chairman, Brigadier General Ashraf Abdullah Yussuf, for over 
forty minutes instead of the head of BEPZA's statistics 
office that they had gone to meet.  On the job for only two 
and a half months, General Ashraf appeared keen to inform 
econoffs of the new initiatives he is undertaking to address 
investor concerns, worker grievances, and the future of the 
EPZs. End Summary. 
 
-------------------------------- 
An Army Man in An Economic Role 
-------------------------------- 
 
¶2.  (U)  Dressed in crisp camouflage BDU's with four rows of 
ribbons over the left pocket, Ashraf offered that he had at 
first been disappointed to learn of his assignment to head a 
civilian organization, but was warming to the job and is now 
glad for the opportunity to "do something for the economic 
well-being of my country."  When offered the chance to expand 
on why an army officer would be placed in charge of an 
organization like BEPZA, he opined that BEPZA was too 
important to the country's economy to be left to the normal 
bureaucratic process, so the government had turned to the 
Army as the one organization in the country that could 
instill discipline and order in an organization.  Army 
officer presence also reassured foreign investors that they 
would get a fair deal and Army officers had more credibility 
than bureaucrats with the workforce because of their 
experience dealing with soldiers who came from backgrounds 
similar to EPZ workers. 
 
¶3.  (U)  Continuing on the theme of the importance that the 
government assigned to the EPZs, Ashraf emphasized that BEPZA 
was functionally located within the Prime Minister's Office 
(PMO) and that the Principal Secretary to the PMO was one of 
the Executive Board members, giving him a much shorter chain 
of command for approval of new programs than most other 
government agencies. 
 
¶4.  (U)  Ashraf did not appear concerned with the upcoming 
elections and did not think his plans and programs would be 
much affected by their outcome.  He suggested that the major 
political parties knew how important the EPZs were for 
economic growth and had little to gain from meddling with 
them.  "We are dealing here with foreign investors," he said 
stressing the word foreign.  (Note:  Not all of the EPZ 
enterprises are foreign.  According to figures he provided 
us, 24 percent of the enterprises are domestically owned and 
15 percent are joint ventures; but we take his point). 
 
----------------------- 
Training Is The Answer 
----------------------- 
 
¶5.  (U)  Ashraf spent much of the meeting discussing the 
repercussions of the recent disturbances in the Dhaka Export 
Processing Zone (REFS A and B), which he appears to have 
taken to heart.  He seemed determined to force BEPZA as an 
organization to step-up to its role as arbitrator between 
workers and management.  He appeared genuinely surprised to 
have learned from his investigations that there were workers 
grievances that had merit and that some factory operators 
were ducking their legal obligations on pay and benefits to 
the workforce.  On the other hand, he was concerned with the 
violent turn that the protests had taken which could damage 
BEPZA's and Bangladesh's efforts to attract and retain 
foreign investors and the low level of understanding on the 
part of the workers on appropriate ways to express grievances 
and take collective action. 
 
¶6.  (U)  To address the current unrest, he was implementing a 
trilateral training program to refresh factory managers on 
their responsibilities toward labor, to educate the workers 
on how to constructively express their grievances and remind 
them of their responsibilities, and to strengthen the 
understanding of BEPZA's staff in their role in enforcing 
workers' and managements' rights rights and duties.  To 
underscore his personal commitment to the new program and to 
reinforce econoffs impression that he was a "hands-on" type 
of manager, he stated enthusiastically that he would be in 
 
DHAKA 00005515  002 OF 002 
 
 
DEPZ-Savar overseeing one of the training programs on 30 
August. 
 
¶7.  (SBU)  To improve security for the investors and to keep 
BEPZA officials better apprised of what was happening on the 
shop floor, Ashraf had implemented a system of sending teams 
of "counselors" to the factories on a recurring basis (he 
mentioned every fifteen days) to check on whether investors 
and workers were living up to their responsibilities.  The 
counselor teams were also empowered to resolve some issues on 
the spot.  According to Ashraf, the project had been 
successful enough to attract World Bank attention as a 
possible model for other countries.  Of more concern, he 
stated that he had proposed to the government the creation of 
a separate industrial police force with an intelligence arm 
that would operate in the EPZs "to find out what the workers 
are really thinking."  Econoffs were unable to get Ashraf to 
elaborate how this intelligence arm would function, whether 
as a simple sounding board or more covertly through 
informants. 
 
---------------- 
Long-term Plans 
---------------- 
 
¶8.  (U)  Over the longer term, Ashraf emphasized his 
determination to improve the delivery of services to the 
investors in the EPZs and that meant more training for the 
BEPZA staff in customer service and customer relations.  His 
plan to reorganize BEPZA had been approved recently and would 
expand BEPZA's authority over import and export approvals for 
the factories to bring BEPZA closer to the ideal of being a 
one-stop service center for all investor needs.  Farther down 
the road, Ashraf stated that the government eventually wanted 
to reorganize the EPZs along product specialization lines to 
improve efficiencies and reduce costs. 
 
¶9.  (U)  A major medium term priority for Ashraf was to 
encourage the development of the existing Workers 
Representation and Welfare Committees (WRWC) into responsible 
organizations for collective action for labor.  "Right now," 
he said, "the WRWCs are good at forwarding demands of every 
worker, but not so good at enforcing discipline on their 
memberships."  He continued that forwarding the demands of 
every worker wasn't an effective way of presenting 
grievances, either, and implied that the WRWCs needed 
training in aggregating, vetting, and presenting demands. 
 
¶10. (U)  Ashraf was keenly aware of how competitive the 
international environment had become and intended to continue 
to send BEPZA officials abroad for fact-finding trips to 
observe how competing countries such as Malaysia and Vietnam 
were attracting investment. 
 
¶11. (U)   Ashraf stated that the EPZ-era was coming to an 
end.  The EPZs had done their job of proving to international 
investors that Bangladesh was a place they could locate and 
prosper, so no further zones were planned.  When the current 
zones fill up, no other firms would be allowed in.  Instead, 
the government was shifting its emphasis toward "investment 
zones" which would still be investor friendly but grant fewer 
financial concessions. 
BUTENIS