VZCZCXRO2304
PP RUEHCI
DE RUEHKA #0315/01 0720619
ZNR UUUUU ZZH
P 120619Z MAR 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 6430
INFO RUEHLM/AMEMBASSY COLOMBO PRIORITY 8364
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2090
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 9589
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0558
RUEHCI/AMCONSUL KOLKATA PRIORITY 1210
UNCLAS SECTION 01 OF 02 DHAKA 000315
SIPDIS
SIPDIS
DEPT PASS TO EEB/IFD/OMA, SNOW, FIGUEROA AND WEBER
E.O. 12958: N/A
TAGS: EAID ECON PREL PGOV KCOR BG
SUBJECT: BANGLADESH CONTRIBUTION TO REPORT ON FISCAL TRANSPARENCY IN
COUNTRIES RECEIVING USG ASSISTANCE
REF: STATE 16737
1. The following is draft text on Bangladesh for the
Congressionally-mandated report on fiscal transparency in countries
receiving USG assistance.
2. While the Government of Bangladesh (GOB) demonstrates a
commitment to financial transparency and accountability, its public
accounting system does not meet international standards. The annual
national budget is made public and is available on the website of
the GOB's Ministry of Finance. Most, but not necessarily all,
revenues and expenditures are included in the publicly-available
budget. The GOB meets regularly with international donors,
including the United States, and frequently provides additional
budget information and updates.
3. As a least developed country (LDC), Bangladesh struggles with
capacity and political will in strengthening fiscal transparency.
Bangladesh's Constitution created the Office of the Comptroller and
Auditor General, which is charged with auditing GOB finances and
reporting its findings to Bangladesh's Parliament. The Office is
run by a Presidential appointee and is an independent body. Its
annual reports to Parliament have highlighted fiscal problems and
abuses. Action is seldom taken on the findings of the Comptroller
and Auditor General, however. When Parliament is in session, there
are two standing committees that exercise fiscal oversight over the
national budget: the Standing Committee on the Ministry of Finance
and the Public Accounts Committee. There are also committees that
oversee public procurement and public enterprises. These committees
in the past have been somewhat effective in policing the GOB's
fiscal transparency.
4. Parliamentary elections were scheduled for January 2007, but
political unrest in Bangladesh led to the imposition of a state of
emergency in January 2007. While Parliament is not session pending
elections scheduled for the end of 2008, Bangladesh's Caretaker
Government has taken numerous steps to address transparency and good
governance generally and government corruption in particular. It
strengthened the country's weak Anti-Corruption Commission (ACC),
formed a National Coordination Committee to help coordinate
government and security forces efforts to investigate graft, and set
up several task forces to help the committee with its work. In
2007, security forces detained several hundred high-profile graft
suspects. Among those detained were former prime ministers Sheikh
Hasina and Khaleda Zia, both of whom were charged in bribery cases
dating to their government tenures. Local media reported in
February 2008 that at least 240 people, including politicians,
government officials and businesspeople, had been sentenced to jail
in the anti-corruption drive.
4. With an aim to contribute to good governance and accountability,
USAID began implementing in October 2007 a four-year, $18 million
anti-corruption program for Bangladesh. It will provide technical
assistance to strengthen parliamentary oversight committees, the
Office of the Comptroller and Auditor General, citizen advocacy and
watchdog initiatives, legal reforms that promote greater access to
reliable information, investigative journalism, and citizen
participation in understanding and developing program-based budgets.
It will help increase the public sector's credible and effective
stewardship of public resources by assisting in a more transparent
development, review and implementation of the Government of
Bangladesh's national budget.
5. The Department of Justice (DOJ) has provided training on
financial investigations to the national corruption task forces.
This training has involved instructors from the Internal Revenue
Service and the U.S. financial intelligence unit, who have taught
simple forensic accounting, investigative methods and interviewing
to 90 members from the five-agency national corruption task forces.
DOJ also has worked with the Government of Bangladesh to establish
an operational financial intelligence unit in the central bank.
6. Bangladesh receives a significant amount of aid from other donor
countries and multi-lateral lending institutions, including in the
areas of fiscal transparency and good governance. In November 2007,
for example, the Asian Development Bank (ADB) and the GOB signed a
$150 million loan agreement aimed at fighting corruption and
fostering economic growth by strengthening governance. Also in
November 2007, the World Bank released a report on Public Sector
Accounting and Auditing in Bangladesh, which recommends Bangladesh
adopt International Public Sector Accounting Standards (IPSAS). The
World Bank is also funding a $24 million Public Procurement Reform
project. The International Monetary Fund's last Report on
Observance of Standards and Codes covering fiscal transparency in
Bangladesh dates from 2005.
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