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Cablegate: Scenesetter for Staffdel Yeo Bangladesh Visit

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.

------------
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.

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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

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