Cablegate: Export Zone Chairman Outlines Plans for Dealing
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.
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An Army Man in An Economic Role
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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).
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Training Is The Answer
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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.
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Long-term Plans
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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