VZCZCXRO0174
OO RUEHCI
DE RUEHKA #0645/01 1681030
ZNR UUUUU ZZH
O 161030Z JUN 08
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6922
INFO RUEHLM/AMEMBASSY COLOMBO PRIORITY 8500
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2229
RUEHKT/AMEMBASSY KATHMANDU PRIORITY 9736
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0703
RUEHCI/AMCONSUL KOLKATA PRIORITY 1347
UNCLAS SECTION 01 OF 02 DHAKA 000645
SENSITIVE
SIPDIS
S/CT FOR SETH BAILEY
IO FOR OIC SPECIAL ENVOY CUMBER
E.O. 12958: N/A
TAGS: PGOV EAIR EIND ETRD SCUL BG
SUBJECT: DESPITE SHORT TENURES, CARETAKER GOVERNMENT
ADVISERS HAVE AMBITIOUS AGENDAS
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SUMMARY
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1. (SBU) Two top officials of the Caretaker Government in
separate meetings with the Ambassador on June 10 outlined
ambitious agendas to improve the quality of education,
promote industry and fix Bangladesh's moribund national air
carrier. Although they emphatically stated they would be gone
from government after Parliamentary elections in December,
Commerce and Education Adviser Hossain Zillur Rahman and
Special Assistant for Civil Aviation and Tourism Mahbub Jamil
hardly sounded like lame ducks. They were pushing
market-friendly development plans that represented a break
from past government policies marred by red tape and
corruption. The Ambassador pledged to do all he could to help.
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EDUCATION: FROM ACCESS TO QUALITY
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2. (SBU) Commerce and Education Adviser Hossain Zillur
Rahman, who is responsible for schools above the primary
level, told the Ambassador he was focusing on improving the
quality of education because previous governments had made
substantial progress in increasing access. Hossain said
improving science and technology education were a priority;
one pilot program, for example, focused on introducing
science studies to madrassahs, which focus on religious
studies. He said Bangladeshi students found technical
training unattractive because courses were out of date and
were not linked to market needs. To strengthen that link he
was pursuing public-private partnerships with industries such
as ship-building.
3. (SBU) Hossain said he had initiated transparent hiring and
recruitment processes for faculty as part of the greater
focus on education quality. He said a "new framework" for
private universities could be in place soon that would
strengthen academic supervision while discouraging investors
from establishing schools that approached education solely as
a money-making endeavor. He also said the government was
opening the Islamic University of Technology to women
students from across the Muslim world.
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COMMERCE: FROM REGULATION TO PROMOTION
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4. (SBU) The government was switching its focus from
regulating business to promoting Bangladeshi business,
including companies already exporting or with the potential
to develop markets abroad, Hossain continued. He listed
plastics, pharmaceuticals, leather and bicycles as
established industries worthy of government promotion. Cut
diamonds, shoes and home textiles such as absorbent towels
were less developed industries that he predicted could emerge
as strong exporters. The success of these industries would
largely depend on whether good public policies could be
successfully integrated into what has been an
initiative-driven business environment, he added.
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CIVIL AVIATION: CUTTING OUT THE DROSS AND GRAFT
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5. (SBU) Special Assistant for Civil Aviation and Tourism
Mahbub Jamil told the Ambassador he would go to the U.S. in
late June to sign a Definitive Agreement on the sale of
Boeing 737-800 aircraft to Biman Bangladesh Airlines -- a
sale that could reach a total value of $320 million. Jamil,
who also is Biman chairman, explained several measures he had
taken to ensure that deal and another for the purchase of
eight widebody aircraft directly from Boeing -- four
777-300ER and four 787-8 planes -- were free of graft. He
gleefully recounted how an old acquaintance had approached
him to broker a 777 deal, offering an older version of the
aircraft at a price $18 million per plane higher than the bid
from Boeing. That offer from a rent-seeking middleman, he
said, was illustrative of how previous purchases of Biman
aircraft had been conducted.
6. (SBU) Jamil said Biman would divest itself of non-core
businesses and would continue to trim its bloated staff. When
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Bangladesh won its independence from Pakistan in 1971, the
4,700 people working for Pakistan International Airlines in
what had been East Pakistan were absorbed by the newly
established national carrier, Biman. Jamil said that he
already had trimmed Biman's bloated workforce by 1,800 people
and would cut another 1,000 in the next two months, which
would create a workforce in line with industry norms.
Non-core businesses at Biman would be divested, Jamil said,
including a 45-acre money-losing poultry farm located 10
kilometers from Dhaka's international airport. Another move
to make Biman commercially competitive would be participating
in one of the international code-sharing alliances, such as
the Star Alliance anchored by United Airlines, he said.
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TOURISM: WHERE ARE THE FOREIGN INVESTORS?
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7. (SBU) Bangladesh needed foreign money to develop its
tourism industry, but the country's image as a place of
natural disasters and political unrest deterred many an
investor, Jamil said. He expressed hope that expatriate
Bangladeshis would be among those who invest in the country,
noting that remitting profits abroad was hassle-free and
fast. Jamil said the National Tourist Board would sell its
hotels and restaurants in a bid to improve the industry.
(Note: Although government-owned hotels often are among the
best in Bangladesh's second-tier cities, their restaurants
can be uninspired and the rooms can be heavily populated with
mosquitoes in the winter and an assortment of bugs, including
flying cockroaches the size of dollar coins, in the summer.
End note.)
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COMMENT: U.S. SUPPORTS ADVISERS ANTI-GRAFT, PRO-MARKET MOVES
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8. (SBU) Post broadly supports the development initiatives
launched by the two advisers, including their efforts to
improve the quality of education, reduce graft and promote
sustainable economic growth. Ambassador Moriarty has
consistently stated publicly, most recently to Bangladeshi
journalists on June 14, that the crackdown on graft must
continue beyond the brief tenure of the Caretaker Government.
In addition to ongoing educational initiatives such as USAID
support for the local Sesame Street program, Post has applied
for an S/CT Ambassadors' Fund grant to help madrassahs adjust
curricula to better prepare students for Bangladesh's labor
market. Post also looks forward to working with S/CT's
Strategic Empowerment Initiative for Public-Private
Partnerships to leverage private capital to expand economic
development and infrastructure, and to improve math, science
and English-language education.
Moriarty