VZCZCXRO0301
OO RUEHCI
DE RUEHKA #0877/01 2270933
ZNR UUUUU ZZH
O 140933Z AUG 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7242
INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0775
RUEHLM/AMEMBASSY COLOMBO 8563
RUEHIL/AMEMBASSY ISLAMABAD 2293
RUEHKT/AMEMBASSY KATHMANDU 9804
RUEHCG/AMCONSUL CHENNAI 0977
RUEHCI/AMCONSUL KOLKATA 1407
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 03 DHAKA 000877 
 
SIPDIS 
 
PLEASE PASS STAFFDEL YEO, FROM AMB JMORIARTY 
DEPT FOR SCA/PB, H FOR DPPARKS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV EAID ECON OTRA PTER BG
SUBJECT: SCENESETTER FOR STAFFDEL YEO BANGLADESH VISIT 
 
----------- 
SUMMARY 
----------- 
 
¶1.  (SBU) Your visit to Bangladesh comes at an important 
juncture in the Caretaker Government's (CTG) term.  The CTG 
is working to set the stage for national elections by the end 
of 2008.  It is negotiating with political parties about the 
transition to a democratically-elected government, as well as 
about the fates of former prime ministers Sheikh Hasina Wajed 
and Begum Khaleda Zia.  While local elections on August 4 
proved a success, the future of the country still hangs in 
the balance.  Many are suspicious of the Bangladesh 
military,s political role and criticize its interference in 
the internal affairs of the parties.  Others fear a return to 
the status quo ante and the violent "winner take all" 
political culture of Bangladesh. 
 
¶2.  (SBU) USG activities in Bangladesh are based on three 
pillars:  Democratization, Development and Denial of space to 
terrorists.  We urge the CTG to lift the State of Emergency 
and support its efforts to ensure free, fair and credible 
elections, while adhering to international human rights 
standards.  We also call upon the political parties to play a 
responsible role in helping to set conditions for elections 
by the end of this year.  The U.S. funds a comprehensive 
development program that includes aid for food, health, 
education, economic growth and governance.  Thanks to funds 
provided by Congress in the FY08 supplemental and FY09 
bridge, the USG is playing a huge role in helping victims of 
last year,s cyclone in southern Bangladesh rebuild their 
lives.  We also cooperate closely with authorities here to 
combat terrorism and prevent Bangladesh from becoming a haven 
for terrorists.  END SUMMARY. 
 
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DEMOCRACY 
---------- 
 
¶2.  (U) The Caretaker Government (CTG) came to power in 
January 2007, the day after a State of Emergency was declared 
to quell political violence that was spinning out of control 
in the run-up to parliamentary elections. The CTG, made up of 
11 non-political advisers and strongly supported by the 
military, canceled the elections and began cracking down on 
endemic political corruption and violence.  The crackdown 
initially won broad public support, but frustration with the 
Caretaker Government spilled onto the streets in late August 
2007; at that point 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 Government 
stopped the protests by imposing a curfew backed up by a show 
of force from the army. 
 
¶3. (U) Bangladesh,s Caretaker Government has pursued two 
primary objectives for the past 18 months: battling 
corruption and preparing for a return to elected government. 
In April, the CTG announced that parliamentary elections 
would occur during the third week of December and began 
negotiations with the nation's major political parties on the 
way forward.  The mechanics of holding elections seem to be 
largely on track, but there is still much debate about an 
"exit strategy" for the Caretaker Government and the 
military, who want to ensure a newly elected government 
maintains reforms and refrains from settling scores. 
 
¶4. (SBU) Compiling a new, credible voter list was the marquee 
project undertaken by a reconstituted Election Commission to 
clean-up the electoral system.  The list was put to the test 
in city and municipal elections on August 4.  According to 
the Election Commission, turnout for the city polls ranged 
from 75% to 93%.  One of Bangladesh,s major political 
parties, the Awami League, stormed to victory, winning three 
of four mayoral slots and other municipal positions.  Embassy 
election observers reported generally minor problems during 
the vote and none of the violence that often marred polls in 
the past.  The big loser was the other major political party, 
the Bangladesh Nationalist Party (BNP), which lost its 
mayoral grip on three major cities.  Although the BNP 
boycotted these elections, the outcome raised questions as to 
whether the BNP would participate in the upcoming upazila 
 
DHAKA 00000877  002 OF 003 
 
 
(sub-district) elections in October and the all-important 
Parliamentary elections scheduled for December. 
 
¶5.  (SBU) The negotiations over the return to democracy 
involve three key players: the Caretaker Government, the 
military and the two main parties.  The Caretaker 
Government,s Advisers (or Ministers) are competent 
technocrats; they want to negotiate a smooth election and a 
successful return to a less corrupt, more efficient 
democracy.  The two major parties seek a return to something 
like the status quo ante, with few checks on the power of the 
Parliament and Prime Minister.  The military appears somewhat 
divided, with most in uniform keen to get out of politics, 
albeit in way that ensures the military,s equities are 
protected. 
 
¶6. (SBU) At issue in the Caretaker Government's talks with 
the parties are both the conditions under which the elections 
will occur and the future of political reform once the 
parties return to power. The CTG has shown some flexibility 
by granting parole to former Prime Minster Sheikh Hasina, 
head of the Awami League, and allowing her to travel 
overseas, for medical treatment.  The CTG,s attempts to cut 
a similar deal with former Prime Minister Khaleda Zia, head 
of Bangladesh Nationalist Party (BNP), have foundered over 
her insistence that her eldest son, Tarique, also be released 
and allowed to leave the country for medical treatment. 
 
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DEVELOPMENT 
------------ 
 
¶7. (U) In the midst of this political uncertainty, 
Bangladeshis are also coping with natural disasters and 
spiraling inflation.  Cyclone Sidr blasted through 
southwestern Bangladesh in November 2007, leaving thousands 
of people dead and destroying the homes and livelihoods of 
millions.  The Government of Bangladesh and international 
donors have not sustained the strong levels of assistance 
they provided victims in Sidr's immediate aftermath, and 
millions of victims remain in need of food, shelter and 
livelihood support.  The additional $75 million for cyclone 
victims approved by Congress recently could not have come at 
more opportune time. 
 
¶8. (SBU) On top of natural disasters, inflation -- 
particularly of food prices -- remains dangerously high for 
Bangladesh's desperately poor population, 84 percent of whom 
subsist on less than $2 a day.  In response to the rising 
food and fuel prices, the Caretaker Government has responded 
with a populist budget aimed at softening the impact of those 
increases.  Just as importantly, overall GDP growth, led by 
surging exports of ready made garments, remains strong; the 
economy grew 6.2 percent in the year completed July 1.  While 
some economists argue the biggest problem facing the economy 
is double-digit inflation, others maintain that Bangladesh 
needs to improve its energy and transportation infrastructure 
and grow its way out of difficulty by expanding exports. 
Despite differing views, however, all agree that a return to 
political chaos in the coming months would deal the economy a 
crushing blow. 
 
------------------------------- 
DENIAL OF SPACE TO TERRORISTS 
------------------------------- 
 
¶9.  (SBU) Although Bangladesh is a moderate Muslim-majority 
nation, its porous borders -- both land and maritime -- make 
it an attractive transit point and safe-haven for terrorists. 
 The USG funds many programs in Bangladesh to counter 
terrorism, including a wide range of 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 madrasas. 
Human rights concerns have prevented the USG from engaging 
the paramilitary Rapid Action Battalion (RAB), which is the 
lead counterterrorism force in Bangladesh.  RAB's record 
generally has improved under the Caretaker Government; during 
the first two weeks of March the United Kingdom provided 
human rights training to build on that positive trend. 
 
¶10.  (SBU) Bangladesh continues to arrest alleged members of 
 
DHAKA 00000877  003 OF 003 
 
 
Jamaatul Mujahedin Bangladesh (JMB), the banned Islamic 
extremist group responsible for a wave of bombings and 
suicide attacks in late 2005, and to recover bomb-making 
materials and weapons from their hideouts. Those arrests, 
along with the execution in March 2007 of six senior JMB 
leaders, appear to have depleted the organization. 
 
----------- 
YOUR VISIT 
----------- 
 
¶12.  (SBU) The coming months will go a long way in 
determining whether Bangladesh pulls off a successful 
democratic transition or begins slouching towards a much 
darker future.  Your visit to Bangladesh will highlight the 
importance Congress places on bilateral relations.  It will 
underscore Congress' support for Bangladesh as it continues 
on the path to free and fair elections by the end of 2008, 
including adhering to the elections roadmap, continuing the 
political dialogue, and lifting the State of Emergency.  Your 
visit also will provide an opportunity to assess the 
effectiveness of several ongoing USG-funded development 
programs.  Your meetings with senior Bangladeshi officials 
will provide opportunities to stress the importance of a 
restoration of democracy and of bilateral cooperation in 
combating terrorism. 
Moriarty