Republican Reference - Area (sq.km) 144,000 - Population 158,570,535 - Capital Dhaka - Currency taka (BDT) - President Zillur Rahman

Bangladesh

BANGLADESH
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Key Economic Data 
 
  2012 2009 2008 Ranking(2012)
GDP
Millions of US $ 115,610 89,378 79,554 58
         
GNI per capita
 US $ 840 520 520 183
Ranking is given out of 213 nations - (data from the World Bank)

Background:
INTRODUCTION: Location: South Asia, between Burma and India; Currency: Bangladesh TAKA; Population: 144,319,628 (as of July 2005); Population below poverty line: 45% (as of 2004); Exchange rate: taka per US dollar - 66.53 (Jan 2006)

Bangladesh's Political Context: 
Bangladesh, prior to its birth, was a part of East India (Bengali dominated) which witnessed a series of invasions by the Dravidian, Mughal and European cultures. Around 1200 A.D., Muslim invaders under Sufi influence, supplanted Hindu and Buddhist dynasties, and converted most of the population of the eastern areas of Bengal to Islam. Since then, Islam has played a crucial role in the region's history and politics. Bengal became part of the Mughal Empire in the 16th century, which in turn gave way to the British Empire. When the Indian National Movement picked up momentum in its crusade against the British Raj in India, the idea of a separate Muslim state was also born. This idea gained significant appeal amongst the Indian Muslims after 1936. The Muslim League which orchestrated the demands of the Indian Muslims suffered a decisive electoral defeat in the first elections under the 1935 constitution. The leader of the Muslim League, Muhammad Ali Jinnah, publicly endorsed the "Pakistan Resolution" that called for the creation of an independent state in Muslim dominated regions. In 1947, as a result of Britain's divide and rule policy, India was partitioned, and two separate nations were created, one of which was Pakistan. Pakistan would consist of the contiguous Muslim-majority districts of western British India, plus parts of Bengal. The various princely states could freely join either India or Pakistan. These arrangements resulted in a bifurcated Muslim nation separated by more than 1,600 kilometres (1,000 mi.) of Indian territory. West Pakistan comprised of four provinces and the capital, Lahore. East Pakistan was formed of a single province. Each province had a legislature. The capital of federal Pakistan was at Islamabad. 
Pakistan's history for the next 25 years was wracked by political instability and economic difficulties. Attempts at civilian political rule failed, and the government imposed martial law between 1958 and 1962 and 1969 and 1972. The Pakistani military used a significant proportion of East Pakistan's resources to develop West Pakistan. As a consequence, there was a growing resentment within the people of the East who began to feel increasingly dominated and exploited by the West. Frictions between West and East Pakistan culminated in a 1971 army crackdown against the East Pakistan dissident movement led by Sheikh Mujibur Rahman, who's Awami League (AL) Party had won 167 seats out of 313 National Assembly seats. Rahman was arrested, his party disbanded, and more than 10 million Bengali refugees fled to India, where they established a provisional government. As a consequence, India and Pakistan went to war in late November 1971. The combined Indian-Bengali forces soon overwhelmed Pakistan's army contingent in the East. Pakistan's forces surrendered on December 16, 1971, by which time, India had taken numerous prisoners and gained control of a large area of East Pakistan, which is now called Bangladesh. 
The 1972 constitution created a strong prime-ministership, an independent judiciary, and a unicameral legislature following the modified British model. More importantly, it enshrined a state policy built around the Awami League's four chief principles: nationalism, secularism, socialism, and democracy. The Awami League emerged victorious in the first parliamentary elections in March 1973. No other political party in Bangladesh's early history was successful in challenging the Awami League's mass-based appeal, membership, or organizational strength. The new government focused on reconstruction of the country's war-torn economy and society. 
In 1974, Rahman proclaimed a state of emergency and amended the constitution to limit the powers of the legislative and judicial branches, establish an executive presidency, and institute a one-party system. Rahman tied to introduce a series of political reforms. However, the reforms were slow and Rahman faced frequent criticism. In August 1975, Mujibur Rahman was assassinated by mid-ranking army officers and a new government, headed by a former associate, Khandakar Moshtaque, was formed. However, following the killing of Major General Khaled Musharraf in a successive coup, Moshtaque resigned and Supreme Court Chief Justice, Muhammad Sayem became president and chief martial law administrator. Soon after, Sayem suffered ill health and was forced to resign, transferring power to Army Chief Zia-ur Rahman on April 21, 1977. In 1978 General Zia announced new elections and an independent judiciary. In 1978, President Zia was assassinated and the acting president Sattar was overthrown in a coup by General Ershad. The constitution was suspended and Ershad became the new martial law administrator.
From the late 1970s, Bangladesh's political history, therefore, begins to resemble Pakistan's through the frequent occurrence of coups. Ershad reaffirmed Bangladesh's moderate, non-aligned foreign policy. In December 1986, Ershad assumed the presidency. Over the next few months, Ershad adopted a new strategy for elections and dealing with potential threats to public order. In 1986, full political rights, including the right to hold large public rallies, were restored. In July 1987, the opposition parties united for the first time in opposition to government policies. Ershad declared a state of emergency in November, dissolved parliament in December, and scheduled new parliamentary elections for March 1988. All major opposition parties refused to participate. Ershad's party won 251 of the 300 seats; three other political parties which did participate, as well as a number of independent candidates, shared the remaining seats. This parliament passed a large number of legislative bills, including a controversial amendment making Islam the state religion. By mid-1990, opposition to Ershad's rule had escalated. November and December 1990 were marked by general strikes, increased campus protests, public rallies, and a general disintegration of law and order. Ershad resigned in December 1990. On February 27, 1991, an interim government oversaw what may be one of the most free and fair elections in the nation's history. The centre-right Bangladesh Nationalist Party won a plurality of seats and formed a coalition government with the Islamic fundamentalist party Jamaat-e-Islami (JI). 
The new Prime Minister, Begum Khaleda Zia, joined the BNP in 1982 and became Chairman of the party in 1984. In September 1991, the electorate approved changes to the constitution, formally creating a parliamentary system and returning governing power to the office of the prime minister, as part of Bangladesh's original constitution. In October 1991, members of parliament elected a new head of state, President Abdur Rahman Biswas. 
Opposition legislators tried to coerce Khaleda to step down and allow early elections under a neutral caretaker administration. But on Khaleda's refusal the opposition staged a series of strikes and shutdowns which slowed reforms and the pace of economic recovery. President Abdur Rahman Biswas dissolved parliament in November 1995 and called new elections for February 1996. Khaleda Zia was requested to remain in office until a successor was chosen. The opposition parties vowed to not to take part in the elections while Khaleda remained in office and boycotted the elections. The new parliament succumbed to the wishes of the opposition and on March 26, passed a law allowing the president to form a caretaker government. Elections were completed by June 23, 1996 with the Awami League garnering the highest number of seats. The leader of the Awami League, Sheikh Hasina Wazed, was sworn in as the new Prime Minister of Bangladesh. Justice Shahabuddin Ahmed was elected unopposed to replace Biswas as the next president of Bangladesh. The end of the Awami League's tenure was marked by opposition boycott of the parliament and increasingly violent attempts at forcing early elections. However, Awami League completed its five year tenure and became the first government to complete its full tenure in Bangladesh. In October of 2001, fresh elections were held and won by a coalition of the Bangladesh National Party (BNP) and three other parties led by Khaleda Zia. Begum Zia was sworn in as the Prime Minister. Political stability in Bangladesh still seems to be elusive given the Awami League's widespread rigging and vote manipulation in elections. Even though Bangladesh has tried to move away from authoritarian rule, it is yet to establish itself as a credible democracy. 

Bangladesh's Economic History (Source: Library of Congress Reports) 
The economic situation facing Bangladesh as it emerged as a new independent nation in 1971 included the highest rural population density in the entire world, an annual population growth rate between 2.5 and 3 per cent, and the dislocation of between 8 and 10 million people who fled to India and returned to independent Bangladesh by 1972. There were dangerous shortages in essential food grains and other staples because of wartime disruptions. Foreign reserves were practically non-existent. The war of independence had crippled the transportation system. Hundreds of road and railroad bridges had been destroyed or damaged, and rolling stock was inadequate and in poor repair. The new country was also recovering from a severe cyclone that hit the area in 1970 causing 250,000 deaths. India came forward immediately with massive economic assistance in the first months after the fighting ended. Between December 1971 and January 1972, India committed US$232 million in aid to Bangladesh, almost all of it for immediate disbursement. The largest single element in Indian aid was 900,000 tons of food grains. The United States and the World Bank thereafter became leading foreign aid donors, and the World Bank organized a consortium known as the Bangladesh Aid Group, consisting of twenty-six international financial institutions and foreign governments interested in assisting Bangladesh's development. 
The World Bank took the lead in addressing some of the most deep-seated structural problems in Bangladesh's economy. It provided productive employment for those without assets, promoted economic opportunities for women and addressed social and economic limitations in different sectors such as education, health, nutrition, and population. The Irrigation Management Program supported drainage and flood control as well as the introduction of pumps and drills; support for maintenance of the nation's more than 43,000 primary schools (including repairs to existing buildings, additions to accommodate larger numbers of pupils, and construction of new schools where needed); and the 500,000-ton Ashuganj fertilizer complex, utilizing domestic natural gas, which came on stream in 1981. 
The World Bank made loans to Bangladesh only from its "soft window," the International Development Association. These interest-free loans provide for a 10-year grace period before repayment of principal begins and a 40-year repayment schedule, with the addition of a service charge of 1.5 percent. Next to the World Bank, the Asian Development Bank emerged as the second largest donor of aid to Bangladesh in the 1980s. By the end of 1985, the Bank had approved 66 loans totalling US$1.8 billion. In 1985 alone, the bank approved loans of US$212.3 million for 6 new projects (down from US$306.8 million for 4 projects the year before). In addition, the bank provided local currency financing of US$59.8 million for 3 projects, co-financing of US$10.5 million to projects with other donors, and a program loan of US$39 million for provision of fertilizer. About half of the Asian Development Bank's financing was invested in the agriculture and agro-industry. 
In examining the economy of Bangladesh, the underlying problems that have plagued development are: overpopulation and inadequate nutrition, health, and education resources; a low standard of living, land scarcity, and vulnerability to natural disaster and weak government and bureaucratic structures. The private sector had benefited from an environment of greater economic freedom and had improved performance in banking and production of jute, fertilizer, ready-made garments, and frozen seafood. The average growth rate of economy had been a steady, if unspectacular, 4 percent since the beginning of the 1980s, close to the world average for developing countries. While Bangladesh's economic development has been marked by successes and failures, international aid and lending agencies have helped the world's "largest poorest" nation to make significant advancements in agriculture and exports. 

Current Economic Situation 
Despite sustained domestic and international efforts to improve economic and demographic prospects, Bangladesh still remains quite a poor, ill-governed and over-populated country. Although half of the country's GDP is generated through the service sector, nearly two-thirds of Bangladeshis are employed in the agriculture sector, with rice as the single-most-important product. Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labour force delays in exploiting energy resources (natural gas), insufficient power supplies, and slow implementation of economic reforms. Corruption at all levels of government is rampant. The bureaucracy, public sector unions, and other vested interest groups have also built obstacles in the smooth functioning and implementation of the country's programs. The Bangladesh National Party (BNP) led by Prime Minister Khaleda Zia has the capacity to push for much needed reforms but lacks the political will. 
Bangladesh's agricultural products include rice, jute, tea, wheat, sugarcane, potatoes, tobacco, pulses, oilseeds, spices, fruit; beef, milk and poultry. Amongst the industries, cotton textiles, jute, garments, tea processing, paper newsprint, cement, chemical fertilizer, light engineering and sugar are most important. Bangladesh's exports, as of 2004, stand at US$7.478 billion. The export commodities include garments, jute and jute goods, leather, frozen fish and seafood Bangladesh's primary export partners are: US 22.7%, Germany 14.5%, UK 10.8%, France 6.7%. Bangladeshi imports stand at US$10.03 billion. The commodities for import include machinery and equipment, chemicals, iron and steel, textiles, foodstuffs, petroleum products, cement. Its primary import partners are India 14.6%, China 11.7%, Singapore 7.8%, Japan 5.8%, Hong Kong 4.8%.

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Update No: 069 - (26/11/13)

Summary: This year was politically and economically turbulent for Bangladesh and the scenario only worsened in November. Poll-bound Bangladesh recently installed an "all-party" interim government headed by PM Sheikh Hasina to oversee upcoming elections despite boycott by the main opposition Bangladesh Nationalist Party (BNP) which termed the move as "farce" (since it was no such thing), heightening tension in the country. The possibility of political violence remains very real and high if the situation is not resolved soon. As a reaction to the worsening crisis in Bangladesh, the Foreign Affairs Subcommittee on Asia and the Pacific of the US Congress, held a hearing on the prevailing political turmoil over the next general election. The US is also in talks with India, Bangladesh's immediate neighbour, who are concerned about the current political deadlock and its security fallout for the region.

Nobel laureate Muhammad Yunus blasted the Bangladesh government after it passed a law he said, that would pave the way for the "ultimate destruction" of Grameen Bank, the pioneering micro-lending institution he founded. The bill passed by the Parliament this month tightens the government's grip on the bank set up to fight poverty, and brings it under ever closer control of the central bank. Moreover, in a vituperative attack against the Nobel Laureate FM Muhith said that the former's speeches - referring to his speech made in Chittagong last month - sound like those of a "terrorist". On a slightly positive note, and more so for India than Bangladesh, the latter has agreed to hand over Anup Chetia, former General Secretary of the United Liberation Front of Asom (ULFA), militant secessionist group in Northeast Indian state of Assam - reflecting growing bonhomie between Dhaka and New Delhi. Finally, in an interesting development tied to the economic woes of Bangladesh, Wal-Mart recently said that about 10 of more than six-dozen Bangladeshi garment factories failed safety checks in audits it commissioned. Compensation is not being paid, causing immense hardship, although it was expected from those western retail chains who use Bangladeshi factories to make clothing.

All-party interim government installed
Poll-bound Bangladesh recently installed an "all-party" interim government headed by PM Sheikh Hasina to oversee upcoming elections despite boycott by the main opposition Bangladesh Nationalist Party (BNP) which termed the move as "farce", heightening tension in the country. Six ministers and two state ministers took oath to join an election-time Cabinet. President Abdul Hamid administered the oath at the presidential palace. In an apparent snub to the Opposition, all the new ministers are from the constituents of the AL-led grand alliance. These include Amir Hossain Amu and Tofail Ahmed (Awami League), Rashed Khan Menon (Workers Party), and Anisul Islam Mahmud, Ruhul Amin Hawlader and Rawshan Ershad (Jatiya Party). The state ministers are: Mujibul Haque Chunnu and Salma Islam (Jatiya Party).

The BNP and its 18-party alliance have repeatedly rejected PM Hasina's call to join the all-party government, saying elections would not be credible under her leadership.

The Opposition has long been demanding restoration of a non-party caretaker government, a constitutional provision which was annulled in June 2011.

The formation of an 'all-party' government headed by PM Hasina has pitted the ruling Awami League against the BNP, raising fear of violence ahead of the elections due to be held by January 25. PM Hasina called on the President on the evening of 17 November and explained her idea about the all-party government. Hasina's meeting with the president came hours after the former Cabinet held an emergency meeting. The ministers had handed their resignation letters to Hasina to pave the way for constituting the all-party government. Given the fact that all the parties within the ruling grand alliance have already been enjoying power, the idea of an interim authority before elections constituting the same political forces might undermine Awami League's already battered legitimacy.

Bangladesh deadlock: US holds Congressional Hearing
As a reaction to the worsening crisis in Bangladesh, the Foreign Affairs Subcommittee on Asia and the Pacific of the US Congress held a hearing on the prevailing political turmoil over the next general elections. The hearing titled 'Bangladesh in Turmoil: A Nation on the Brink?' was held at the House Rayburn Office Building Washington, according to the United States House of Representatives. Prof Ali Riaz, a public policy scholar at the Woodrow Wilson Center, Maj Gen (retd) AMN Muniruzzaman, president of Bangladesh Institute of Peace and Security Studies, and John Stifton, Asia Advocacy Director of Human Rights Watch, participated in the hearing as witnesses. US Congressional hearings are considered highly important as the US Representative Steve Chabot, chairman of the Foreign Affairs Subcommittee on Asia and the Pacific, who visited Bangladesh on November 5-6, shared his experience during the visit.

The decision and recommendations of the sub-committee are crucial as it has a wide range of jurisdiction from politics to foreign aid, loans and security matters. During his visit to Bangladesh, Steve Chabot met with PM Sheikh Hasina, opposition leader Khaleda Zia, Foreign Minister Dipu Moni, leaders of Jamaat and other political parties, civil society representatives and media, and discussed political turbulence, upcoming election and ongoing war crimes trials and overall security situation in Bangladesh.The 14-member subcommittee headed by Steve Chabot will discuss the entire range of US-Bangladesh bilateral issues, including the US role in resolving the current political challenges in Bangladesh, as well as holding a free, fair, transparent, credible and inclusive general election. Moreover, US is also in talks with India, Bangladesh's immediate neighbour, who is concerned about the current political deadlock and its security fallout for the region.

Yunus flays government, FM Muhith calls his speeches 'terrorist-like'
Nobel laureate Muhammad Yunus blasted the Bangladesh government after it passed a law he said would pave the way for the "ultimate destruction" of Grameen Bank, the pioneering micro-lending institution he founded. The bill passed by the Parliament this month tightens the government's grip on the bank set up to fight poverty, and brings it under ever closer control of the central bank. Yunus, who was ousted from the lender in 2011 in what was seen as a politically engineered move, condemned the new law and said it "created the opportunity for the government to take 100 per cent control of the bank", with which he shared the Nobel. "Grameen Bank was created as a bank owned by poor women, and managed by poor women. Its legal structure did not allow any government interference of any kind, except for regulatory oversight," he said in a statement.

These amendments fundamentally change the character of the bank. "I feel extremely sorry that the nation has to go through the unnecessary traumatic experience of seeing a great global iconic institution, created by this nation, be brutally harmed by a group of irresponsible and thoughtless people," he added. On the other hand, however, Finance Minister A.M.A. Muhith defended the new law, saying it was a constitutional requirement because the original ordinance that created the bank in 1983 during military rule must be passed by parliament. "The Supreme Court has outlawed all ordinances that were enacted by the military regime," he said. The new law replaced the Grameen Bank Ordinance but also made some amendments, bringing its finances under close supervision of the central bank and raising its authorised capital level.

From now on the bank's new branches must be approved by the central bank and it cannot run any business beyond its mandated area of lending to landless entrepreneurs (usually village women) in rural areas. This will lead to wonderful opportunities for corruption for ministers, civil servants, etc; already infamous for using their positions for personal profit, because Grameen founded what became a very large mobile telephone operation, again primarily for village women who cannot afford the commercial deals offered by international phone companies, as well as other spinoffs co-operatively owned like the bank itself, which can now also expect to be raped.

The government has progressively moved to control the bank, raising its stake to 25 per cent from around three per cent. The Supreme Court of Bangladesh has ruled that Grameen is a state-owned bank no matter what the government's stake is. It ordered a commission on the future status of the bank and has launched a tax probe against Yunus, who has been at odds with PM Sheikh Hasina since 2007 when he made a brief foray into politics. The 73-year-old economist, who won a Nobel prize in 2006, was branded a "bloodsucker" by PM Hasina (who is unlikely herself ever to be considered for a Nobel prize), and has recently been the subject of a hate campaign by state-funded Islamic clerics who clearly hate to see this advancement of women.

Moreover, in a vituperative attack against the Nobel Laureate FM Muhith said that the former's speeches - referring to his speech made in Chittagong last month - sound like those of a "terrorist". Yunus' had lambasted the government for it's 'intent to grab' the Grameen Bank.

Bangladesh to handover militant to India
Reflecting growing bonhomie between New Delhi and Dhaka, Bangladesh has agreed to hand over Anup Chetia, former General Secretary of the United Liberation Front of Asom (ULFA), militant secessionist group in Northeast Indian state of Assam. Chetia, currently lodged in a jail in Bangladesh, will be extradited after completion of judicial formalities, said Home Minister Mohiuddin Khan Alamgir. Chetia had sought political asylum in Bangladesh three times in 2005, 2008 and 2011 after being arrested in Dhaka in 1997. He is in jail on charges of illegally entering Bangladesh using a forged passport and for possessing illegal foreign currency and illegal arms. His jail term ended in 2003. The two countries had recently signed an extradition treaty as their relationship warmed under the leadership of Indian PM Manmohan Singh and Bangladeshi PM Sheikh Hasina.

Walmart finds safety issues at Bangladesh factories
In an interesting development tied to the economic woes of Bangladesh, Wal-Mart recently said that about 10 of more than six-dozen Bangladeshi garment factories failed safety checks in audits it commissioned. The retailer hired Bureau Veritas to check some 200 factories it uses in Bangladesh, after the April collapse of the Rana Plaza building that killed more than 1,100 people and highlighted the often-grim conditions in the country's garment industry. About 75 factories have been audited so far and Wal-Mart says it will release results for other factories as the inspections are completed. In the aftermath of the Rana Plaza disaster, major European clothing retailers signed up to a system of factory inspections in conjunction with labor and activist groups. North American retailers set up a separate alliance and established a fund that could be tapped for factory improvements. Bangladesh emerged as a major supplier to global clothing brands because of wages that are among the lowest in the world. Bangladeshi garment makers employ millions of people, mostly women, but safety has been an afterthought amid pressure to fill orders, while enforcement of labor rights and building safety codes is compromised by corruption and thin government resources. This month garment factory owners agreed to a 77 per cent increase in the minimum wage for new unskilled garment workers to 5,300 takas (approx. US$66) per month after PM Hasina stepped in to resolve four days of violent clashes over wages. The worker's safety issue has added to the anti-government narrative that is in vogue in Bangladesh.
 

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