VZCZCXRO0174
OO RUEHCI
DE RUEHKA #0645/01 1681030
ZNR UUUUU ZZH
O 161030Z JUN 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6922
INFO RUEHLM/AMEMBASSY COLOMBO PRIORITY 8500
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2229
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 9736
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0703
RUEHCI/AMCONSUL KOLKATA PRIORITY 1347

UNCLAS SECTION 01 OF 02 DHAKA 000645 
 
SENSITIVE 
SIPDIS 
 
S/CT FOR SETH BAILEY 
IO FOR OIC SPECIAL ENVOY CUMBER 
 
E.O. 12958: N/A 
TAGS: PGOV EAIR EIND ETRD SCUL BG
SUBJECT: DESPITE SHORT TENURES, CARETAKER GOVERNMENT 
ADVISERS HAVE AMBITIOUS AGENDAS 
 
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SUMMARY 
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¶1. (SBU) Two top officials of the Caretaker Government in 
separate meetings with the Ambassador on June 10 outlined 
ambitious agendas to improve the quality of education, 
promote industry and fix Bangladesh's moribund national air 
carrier. Although they emphatically stated they would be gone 
from government after Parliamentary elections in December, 
Commerce and Education Adviser Hossain Zillur Rahman and 
Special Assistant for Civil Aviation and Tourism Mahbub Jamil 
hardly sounded like lame ducks. They were pushing 
market-friendly development plans that represented a break 
from past government policies marred by red tape and 
corruption. The Ambassador pledged to do all he could to help. 
 
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EDUCATION: FROM ACCESS TO QUALITY 
--------------------------------- 
 
¶2. (SBU) Commerce and Education Adviser Hossain Zillur 
Rahman, who is responsible for schools above the primary 
level, told the Ambassador he was focusing on improving the 
quality of education because previous governments had made 
substantial progress in increasing access. Hossain said 
improving science and technology education were a priority; 
one pilot program, for example, focused on introducing 
science studies to madrassahs, which focus on religious 
studies. He said Bangladeshi students found technical 
training unattractive because courses were out of date and 
were not linked to market needs. To strengthen that link he 
was pursuing public-private partnerships with industries such 
as ship-building. 
 
¶3. (SBU) Hossain said he had initiated transparent hiring and 
recruitment processes for faculty as part of the greater 
focus on education quality. He said a "new framework" for 
private universities could be in place soon that would 
strengthen academic supervision while discouraging investors 
from establishing schools that approached education solely as 
a money-making endeavor. He also said the government was 
opening the Islamic University of Technology to women 
students from across the Muslim world. 
 
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COMMERCE: FROM REGULATION TO PROMOTION 
-------------------------------------- 
 
¶4. (SBU) The government was switching its focus from 
regulating business to promoting Bangladeshi business, 
including companies already exporting or with the potential 
to develop markets abroad, Hossain continued. He listed 
plastics, pharmaceuticals, leather and bicycles as 
established industries worthy of government promotion. Cut 
diamonds, shoes and home textiles such as absorbent towels 
were less developed industries that he predicted could emerge 
as strong exporters. The success of these industries would 
largely depend on whether good public policies could be 
successfully integrated into what has been an 
initiative-driven business environment, he added. 
 
--------------------------------------------- -- 
CIVIL AVIATION: CUTTING OUT THE DROSS AND GRAFT 
--------------------------------------------- -- 
 
¶5. (SBU)  Special Assistant for Civil Aviation and Tourism 
Mahbub Jamil told the Ambassador he would go to the U.S. in 
late June to sign a Definitive Agreement on the sale of 
Boeing 737-800 aircraft to Biman Bangladesh Airlines -- a 
sale that could reach a total value of $320 million. Jamil, 
who also is Biman chairman, explained several measures he had 
taken to ensure that deal and another for the purchase of 
eight widebody aircraft directly from Boeing -- four 
777-300ER and four 787-8 planes -- were free of graft. He 
gleefully recounted how an old acquaintance had approached 
him to broker a 777 deal, offering an older version of the 
aircraft at a price $18 million per plane higher than the bid 
from Boeing. That offer from a rent-seeking middleman, he 
said, was illustrative of how previous purchases of Biman 
aircraft had been conducted. 
 
¶6. (SBU) Jamil said Biman would divest itself of non-core 
businesses and would continue to trim its bloated staff. When 
 
DHAKA 00000645  002 OF 002 
 
 
Bangladesh won its independence from Pakistan in 1971, the 
4,700 people working for Pakistan International Airlines in 
what had been East Pakistan were absorbed by the newly 
established national carrier, Biman. Jamil said that he 
already had trimmed Biman's bloated workforce by 1,800 people 
and would cut another 1,000 in the next two months, which 
would create a workforce in line with industry norms. 
Non-core businesses at Biman would be divested, Jamil said, 
including a 45-acre money-losing poultry farm located 10 
kilometers from Dhaka's international airport. Another move 
to make Biman commercially competitive would be participating 
in one of the international code-sharing alliances, such as 
the Star Alliance anchored by United Airlines, he said. 
 
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TOURISM: WHERE ARE THE FOREIGN INVESTORS? 
----------------------------------------- 
 
¶7. (SBU) Bangladesh needed foreign money to develop its 
tourism industry, but the country's image as a place of 
natural disasters and political unrest deterred many an 
investor, Jamil said. He expressed hope that expatriate 
Bangladeshis would be among those who invest in the country, 
noting that remitting profits abroad was hassle-free and 
fast. Jamil said the National Tourist Board would sell its 
hotels and restaurants in a bid to improve the industry. 
(Note: Although government-owned hotels often are among the 
best in Bangladesh's second-tier cities, their restaurants 
can be uninspired and the rooms can be heavily populated with 
mosquitoes in the winter and an assortment of bugs, including 
flying cockroaches the size of dollar coins, in the summer. 
End note.) 
 
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COMMENT: U.S. SUPPORTS ADVISERS ANTI-GRAFT, PRO-MARKET MOVES 
 
----------------------------------------- 
 
¶8. (SBU) Post broadly supports the development initiatives 
launched by the two advisers, including their efforts to 
improve the quality of education, reduce graft and promote 
sustainable economic growth. Ambassador Moriarty has 
consistently stated publicly, most recently to Bangladeshi 
journalists on June 14, that the crackdown on graft must 
continue beyond the brief tenure of the Caretaker Government. 
In addition to ongoing educational initiatives such as USAID 
support for the local Sesame Street program, Post has applied 
for an S/CT Ambassadors' Fund grant to help madrassahs adjust 
curricula to better prepare students for Bangladesh's labor 
market. Post also looks forward to working with S/CT's 
Strategic Empowerment Initiative for Public-Private 
Partnerships to leverage private capital to expand economic 
development and infrastructure, and to improve math, science 
and English-language education. 
 
Moriarty