VZCZCXRO9220
OO RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHKA #0555/01 1541010
ZNY SSSSS ZZH
O 031010Z JUN 09
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8927
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
RHHJJPI/PACOM IDHS HONOLULU HI PRIORITY

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