Highlighting Bangladesh as the next area for US-India cooperation, DAS Gastright urged that during the April 18 Regional Dialogue with A/S Rocca, we work towards a playbook of carrots and sticks that we can offer the BDG to encourage it to improve governance.

30697, 4/13/2005 13:52, 05NEWDELHI2792, Embassy New Delhi, CONFIDENTIAL,, "This record is a partial extract of the original cable. The full text of the original cable is not available.

","C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 002792

SIPDIS

E.O. 12958: DECL: 04/12/2015

TAGS: PREL, PTER, KISL, IN, BG, India-Bangladesh, Indo-US

SUBJECT: DAS GASTRIGHT ENCOURAGES COORDINATION ON BANGLADESH

Classified By: PolCouns Geoff Pyatt. Reasons 1.4 (B, D)

1. (C) Summary: In an April 18 meeting with MEA Joint Secretary Neelam Deo (Bangladesh), SA DAS John Gastright SIPDIS emphasized that all concerned countries, not just India and the US, should encourage the BDG to improve its governance. Deo agreed that Bangladesh was still at a point where it could reverse some of the negative trends, but expressed deep skepticism about the current situation, and noted GOI concern about the growing influence of radical Islamists. End Summary.

Expanding Dialogue

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2. (C) Highlighting Bangladesh as the next area for US-India cooperation, DAS Gastright urged that during the April 18 Regional Dialogue with A/S Rocca, we work towards a playbook of carrots and sticks that we can offer the BDG to encourage it to improve governance. DAS Gastright explained that due in part to New Delhi's prodding, Washington has taken a careful look at the situation in Bangladesh and has developed a strategy of working cooperatively with the BDG and letting them know we are paying attention. Dhaka has noticed Washington's stepped-up attention to issues of governance, and has recently taken a number of steps that the donor community has recommended. Deo responded that certainly the BDG was capable of reversing the slide, but the ""real tragedy"" was that despite having the ability, Dhaka has accomplished very little.

SAARC Summit: A Possible Indian Carrot

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3. (C) DAS Gastright offered the SAARC Summit as an example of something positive India might offer Dhaka as an inducement to better governance. Deo was sympathetic that the BDG had put a great deal of effort, twice, into organizing the meeting, but added that it was not just the ""blasts"" that soured New Delhi on the Summit. Noting ""a real buildup in unfriendly attitude,"" Deo recounted that just prior to the original January SAARC date, a serving general, in a speech cleared by the PM's office, declared the need to ""build alliances to counter the enemy -- India.""

4. (C) Observing that the US and India already convey the same message on many issues, Deo pointed out that we have both underlined to the BDG the importance of economic ties with India. While there was still dissent in Dhaka on whether or not to work with India on the Burma-Bangladesh-India gas pipeline (an example of how politicized any cooperation with India is, she noted), the Tata Corporation was working towards a June deadline for completing a feasibility study for its proposed USD two billion dollar investment in steel and fertilizer plants. Deo added that the Tata project had generated interest among other Indian companies in doing business in Bangladesh and was helping to improve the atmosphere. However, she noted with concern that the Tata project is being overseen by the

BDG Industry Minister Nizami, who represents Jamaat-e-Islami.

GOI Sees Lurking Extremism

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5. (C) Zeroing in on madrassas as the source of Islamic extremism, Deo remarked that some of these schools are training jehadis, even though the state itself is not abetting jihadism. While agreeing that Islam in Bangladesh was generally moderate and resistant to militancy, the Joint Secretary argued that there were some organizations, SIPDIS particularly in the Chittagong Hill Tracts, that with foreign funding were ""building something that could get out of control."" Citing this and the Chittagong arms haul, she added that she did not think the BDG was intentionally abetting these groups, but corruption was a huge problem.

6. (C) Deo also reiterated the GOI assertion that the Pakistani foreign intelligence agency, ISI, has been active in Bangladesh. Among the GOI's concerns that the MEA has previously expressed, Deo placed particular emphasis on the extent to which the Islamic parties were dampening social and cultural life in Bangladesh, especially for female athletes. She cited recent analysis by the ""Friday Times'"" Khaled Ahmed as evidence that Bangladesh was following an Islamist trajectory similar to Pakistan in the 1980s. In response to Deo's inquiry about US involvement in the Kibria investigation, DAS Gastright clarified that ours was an advisory role.

Elections? Why Bother?

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7. (C) Noting the possibility that opposition leader Sheikh Hasina would not run for office, Deo was not hopeful that there would be anything resembling free and fair elections in Bangladesh. The Joint Secretary commented that the BNP was willing to tamper with the electoral system to ensure a victory. DAS Gastright told Deo that along with the EU's USD 25 million for election monitors, the US was committing USD 10 million for elections, to convey to the BDG that the international community is watching closely, and that the US is emphasizing a closely scrutinized process, instead of personalities. Deo welcomed this observation, reiterating that India wants to coordinate closely with the US on Bangladesh.

MULFORD

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