OFFICIAL NAME:
People's Republic of Bangladesh

Geography
Area: 147, 570 sq. km. (55,813 sq. mi.); about the size of Wisconsin.
Cities: Capital--Dhaka (pop. 10 million). Other cities--Chittagong (2.8 million), Khulna (1.8 million), Rajshahi (1 million).
Terrain: Mainly flat alluvial plain, with hills in the northeast and southeast.
Climate: Semitropical, monsoonal.

People
Nationality: Noun and adjective--Bangladeshi(s).
Population: 140 million
Annual growth rate: 1.48%
Ethnic groups: Bengali 98%, tribal groups, non-Bengali Muslims
Religions: Muslim 88.3%; Hindu 10.5%; Christian 0.3%, Buddhist 0.6%, others 0.3%
Languages: Bangla (official, also known as Bengali), English
Education: Attendance—55.9% Literacy--52% for males; 31% for females; a total of 41% literacy.
Health: Infant mortality rate--48/1,000. Life expectancy—60.7 years (male), 60.9 years (female).
Work force (60.3 million): Agriculture--60%; manufacturing & mining—7.8%; others—28.5%.

Government
Type: Parliamentary democracy.
Independence: 1971 (from Pakistan).
Constitution: 1972; amended 1974, 1979, 1986, 1988, 1991, 1996, 2004.
Branches: Executive--president (chief of state), prime minister (head of government), cabinet. Legislative--unicameral Parliament (300 members). Judicial--civil court system based on British model.
Administrative subdivisions: Divisions, districts, subdistricts, unions, villages.
Political
parties: 30-40 active political parties: largest ones include
Bangladesh Nationalist Party (BNP), the Awami League, the Jatiya Party,
and the Jamaat-e-Islam Party.
Suffrage: Universal at age 18.

Economy
Fiscal year: July 1 to June 30.
Annual GDP growth rate (2004 est.): 5.52%.
Inflation (April 2004): 5.75%.
Per capita GDP (2003): $389.
Natural resources: Natural gas, fertile soil, water.
Agriculture (25% of GDP): Products--rice, jute, tea, sugar, wheat. Land--cultivable
area cropped at rate of 176% in 1997; largely subsistence farming
dependent on monsoon rainfall, but growing commercial farming and
increasing use of irrigation.
Industry (26% of GDP): Types--garments
and knitwear, jute goods, frozen fish and seafood, textiles,
fertilizer, sugar, tea, leather, shipbreaking for scrap,
pharmaceuticals, ceramic tableware, newsprint.
Trade (2003): Merchandise exports--$6.5
billion: garments and knitwear, frozen fish, jute and jute goods,
leather and leather products, tea, urea fertilizer, ceramic tableware. Exports to U.S. (2003)--$2.074 billion. Merchandise imports (2003)--$9.7 billion: capital goods, food grains, petroleum, textiles, chemicals, vegetable oils. Imports from U.S. (2003)--$226 million.

GEOGRAPHY
Bangladesh
is a low-lying, riverine country located in South Asia with a largely
marshy jungle coastline of 710 kilometers (440 mi.) on the northern
littoral of the Bay of Bengal. Formed by a deltaic plain at the
confluence of the Ganges (Padma), Brahmaputra (Jamuna), and Meghna
Rivers and their tributaries, Bangladesh's alluvial soil is highly
fertile but vulnerable to flood and drought. Hills rise above the plain
only in the Chittagong Hill Tracts in the far southeast and the Sylhet
division in the northeast. Straddling the Tropic of Cancer, Bangladesh
has a subtropical monsoonal climate characterized by heavy seasonal
rainfall, moderately warm temperatures, and high humidity. Natural
calamities, such as floods, tropical cyclones, tornadoes, and tidal
bores affect the country almost every year. Bangladesh also is affected
by major cyclones--on average 16 times a decade.

Urbanization is proceeding
rapidly, and it is estimated that only 30% of the population entering
the labor force in the future will be absorbed into agriculture,
although many will likely find other kinds of work in rural areas. The
areas around Dhaka and Comilla are the most densely settled. The
Sundarbans, an area of coastal tropical jungle in the southwest and
last wild home of the Bengal Tiger, and the Chittagong Hill Tracts on
the southeastern border with Burma and India, are the least densely
populated.

PEOPLE
The
area which is now Bangladesh has a rich historical and cultural past,
combining Dravidian, Indo-Aryan, Mongol/Mughul, Arab, Persian, Turkic,
and west European cultures. Residents of Bangladesh, about 98% of whom
are ethnic Bengali and speak Bangla, are called Bangladeshis.
Urdu-speaking, non-Bengali Muslims of Indian origin, and various tribal
groups, mostly in the Chittagong Hill Tracts, comprise the remainder.
Most Bangladeshis (about 88.3%) are Muslims, but Hindus constitute a
sizable (10.5%) minority. There also are a small number of Buddhists,
Christians, and animists. English is spoken in urban areas and among
the educated.

Sufi religious teachers
succeeded in converting many Bengalis to Islam, even before the arrival
of Muslim armies from the west. About 1200 AD, Muslim invaders
established political control over the Bengal region. This political
control also encouraged conversion to Islam. Since then, Islam has
played a crucial role in the region's history and politics, with a
Muslim majority emerging, particularly in the eastern region of Bengal.

HISTORY
Bengal
was absorbed into the Mughul Empire in the 16th century, and Dhaka, the
seat of a nawab (the representative of the emperor), gained some
importance as a provincial center. But it remained remote and thus a
difficult to govern region--especially the section east of the
Brahmaputra River--outside the mainstream of Mughul politics.
Portuguese traders and missionaries were the first Europeans to reach
Bengal in the latter part of the 15th century. They were followed by
representatives of the Dutch, the French, and the British East India
Companies. By the end of the 17th century, the British presence on the
Indian subcontinent was centered in Calcutta. During the 18th and 19th
centuries, the British gradually extended their commercial contacts and
administrative control beyond Calcutta to Bengal. In 1859, the British
Crown replaced the East India Company, extending British dominion from
Bengal, which became a region of India, in the east to the Indus River
in the west.

The rise of nationalism
throughout British-controlled India in the late 19th century resulted
in mounting animosity between the Hindu and Muslim communities. In
1885, the All-India National Congress was founded with Indian and
British membership. Muslims seeking an organization of their own
founded the All-India Muslim League in 1906. Although both the League
and the Congress supported the goal of Indian self-government within
the British Empire, the two parties were unable to agree on a way to
ensure the protection of Muslim political, social, and economic rights.
The subsequent history of the nationalist movement was characterized by
periods of Hindu-Muslim cooperation, as well as by communal antagonism.
The idea of a separate Muslim state gained increasing popularity among
Indian Muslims after 1936, when the Muslim League suffered a decisive
defeat in the first elections under India's 1935 constitution. In 1940,
the Muslim League called for an independent state in regions where
Muslims were in the majority. Campaigning on that platform in
provincial elections in 1946, the League won the majority of the Muslim
seats contested in Bengal. Widespread communal violence followed,
especially in Calcutta.

When British India was
partitioned and the independent dominions of India and Pakistan were
created in 1947, the region of Bengal was divided along religious
lines. The predominantly Muslim eastern half was designated East
Pakistan--and made part of the newly independent Pakistan--while the
predominantly Hindu western part became the Indian state of West
Bengal. Pakistan's history from 1947 to 1971 was marked by political
instability and economic difficulties. Dominion status was rejected in
1956 in favor of an "Islamic republic within the Commonwealth."
Attempts at civilian political rule failed, and the government imposed
martial law between 1958 and 1962, and again between 1969 and 1972.

Almost from the advent of
independent Pakistan in 1947, frictions developed between East and West
Pakistan, which were separated by more than 1,000 miles of Indian
territory. East Pakistanis felt exploited by the West
Pakistan-dominated central government. Linguistic, cultural, and ethnic
differences also contributed to the estrangement of East from West
Pakistan. Bengalis strongly resisted attempts to impose Urdu as the
sole official language of Pakistan. Responding to these grievances,
Sheikh Mujibur Rahman in 1948 formed a students' organization called
the Chhatra League. In 1949, Maulana Abdul Hamid Khan Bhasani and some
other Bengali leaders formed the East Pakistan Awami Muslim League
(AL), a party designed mainly to promote Bengali interests. This party
dropped the word Muslim from its name in 1955 and came to be known as
Awami League. Mujib became president of the Awami League in 1966 and
emerged as leader of the Bengali autonomy movement. In 1966, he was
arrested for his political activities.

After the Awami League won
almost all the East Pakistan seats of the Pakistan national assembly in
1970-71 elections, West Pakistan opened talks with the East on
constitutional questions about the division of power between the
central government and the provinces, as well as the formation of a
national government headed by the Awami League. The talks proved
unsuccessful, however, and on March 1, 1971, Pakistani President Yahya
Khan indefinitely postponed the pending national assembly session,
precipitating massive civil disobedience in East Pakistan. Mujib was
arrested again; his party was banned, and most of his aides fled to
India, where they organized a provisional government. On March 26,
1971, following a bloody crackdown by the Pakistan Army, Bengali
nationalists declared an independent People's Republic of Bangladesh.
As fighting grew between the army and the Bengali mukti bahini
("freedom fighters"), an estimated 10 million Bengalis, mainly Hindus,
sought refuge in the Indian states of Assam and West Bengal.

The crisis in East Pakistan
produced new strains in Pakistan's troubled relations with India. The
two nations had fought a war in 1965, mainly in the west, but the
refugee pressure in India in the fall of 1971 produced new tensions in
the east. Indian sympathies lay with East Pakistan, and in November,
India intervened on the side of the Bangladeshis. On December 16, 1971,
Pakistani forces surrendered, and Bangladesh-- meaning "Bengal
nation"-- was born; the new country became a parliamentary democracy
under a 1972 constitution.

The provisional government
of the new nation of Bangladesh was formed in Dhaka with Justice Abu
Sayeed Choudhury as President, and Sheikh Mujibur Rahman ("Mujib")--who
was released from Pakistani prison in early 1972--as Prime Minister.

Sheikh Mujibur Rahman, 1972-75
Mujib
came to office with immense personal popularity but had difficulty
transforming this popular support into the political strength needed to
function as head of government. The new constitution, which came into
force in December 1972, created a strong executive prime minister, a
largely ceremonial presidency, an independent judiciary, and a
unicameral legislature on a modified Westminster model. The 1972
constitution adopted as state policy the Awami League's (AL) four basic
principles of nationalism, secularism, socialism, and democracy.

The first parliamentary
elections held under the 1972 constitution were in March 1973, with the
Awami League winning a massive majority. No other political party in
Bangladesh's early years was able to duplicate or challenge the
League's broad-based appeal, membership, or organizational strength.
Relying heavily on experienced civil servants and members of the Awami
League, the new Bangladesh Government focused on relief,
rehabilitation, and reconstruction of the economy and society. Economic
conditions remained precarious, however. In December 1974, Mujib
decided that continuing economic deterioration and mounting civil
disorder required strong measures. After proclaiming a state of
emergency, Mujib used his parliamentary majority to win a
constitutional amendment limiting the powers of the legislative and
judicial branches, establishing an executive presidency, and
instituting a one-party system, the Bangladesh Krishak Sramik Awami
League (BAKSAL), which all members of Parliament (and senior civil and
military officials) were obliged to join.

Despite some improvement in
the economic situation during the first half of 1975, implementation of
promised political reforms was slow, and criticism of government
policies became increasingly centered on Mujib. In August 1975, Mujib,
and most of his family, were assassinated by mid-level army officers.
His daughter, Sheikh Hasina, was out of the country. A new government,
headed by former Mujib associate Khandakar Moshtaque, was formed.

Ziaur Rahman, 1975-81
Successive
military coups resulted in the emergence of Army Chief of Staff Gen.
Ziaur Rahman ("Zia") as strongman. He pledged the army's support to the
civilian government headed by President Chief Justice Sayem. Acting at
Zia's behest, Sayem dissolved Parliament, promising fresh elections in
1977, and instituted martial law.

Acting behind the scenes of
the Martial Law Administration (MLA), Zia sought to invigorate
government policy and administration. While continuing the ban on
political parties, he sought to revitalize the demoralized bureaucracy,
to begin new economic development programs, and to emphasize family
planning. In November 1976, Zia became Chief Martial Law Administrator
(CMLA) and assumed the presidency upon Sayem's retirement 5 months
later, promising national elections in 1978.

As President, Zia announced
a 19-point program of economic reform and began dismantling the MLA.
Keeping his promise to hold elections, Zia won a 5-year term in June
1978 elections, with 76% of the vote. In November 1978, his government
removed the remaining restrictions on political party activities in
time for parliamentary elections in February 1979. These elections,
which were contested by more than 30 parties, marked the culmination of
Zia's transformation of Bangladesh's Government from the MLA to a
democratically elected, constitutional one. The AL and the Bangladesh
Nationalist Party (BNP), founded by Zia, emerged as the two major
parties.

In May 1981, Zia was
assassinated in Chittagong by dissident elements of the military. The
attempted coup never spread beyond that city, and the major
conspirators were either taken into custody or killed. In accordance
with the constitution, Vice President Justice Abdus Sattar was sworn in
as acting president. He declared a new national emergency and called
for election of a new president within 6 months--an election Sattar won
as the BNP's candidate. President Sattar sought to follow the policies
of his predecessor and retained essentially the same cabinet, but the
army stepped in once again.

Hussain Mohammed Ershad, 1982-90
Army
Chief of Staff Lt. Gen. H.M. Ershad assumed power in a bloodless coup
in March 1982. Like his predecessors, Ershad suspended the constitution
and--citing pervasive corruption, ineffectual government, and economic
mismanagement--declared martial law. The following year, Ershad assumed
the presidency, retaining his positions as army chief and CMLA. During
most of 1984, Ershad sought the opposition parties' participation in
local elections under martial law. The opposition's refusal to
participate, however, forced Ershad to abandon these plans. Ershad
sought public support for his regime in a national referendum on his
leadership in March 1985. He won overwhelmingly, although turnout was
small. Two months later, Ershad held elections for local council
chairmen. Pro-government candidates won a majority of the posts,
setting in motion the President's ambitious decentralization program.
Political life was further liberalized in early 1986, and additional
political rights, including the right to hold large public rallies,
were restored. At the same time, the Jatiya (People's) Party, designed
as Ershad's political vehicle for the transition from martial law, was
established.

Despite a boycott by the
BNP, led by President Zia's widow, Begum Khaleda Zia, parliamentary
elections were held on schedule in May 1986. The Jatiya Party won a
modest majority of the 300 elected seats in the National Assembly. The
participation of the Awami League--led by the late President Mujib's
daughter, Sheikh Hasina Wajed-- lent the elections some credibility,
despite widespread charges of voting irregularities.

Ershad resigned as Army
Chief of Staff and retired from military service in preparation for the
presidential elections, scheduled for October. Protesting that martial
law was still in effect, both the BNP and the AL refused to put up
opposing candidates. Ershad easily outdistanced the remaining
candidates, taking 84% of the vote. Although Ershad's government
claimed a turnout of more than 50%, opposition leaders, and much of the
foreign press, estimated a far lower percentage and alleged voting
irregularities.

Ershad continued his stated
commitment to lift martial law. In November 1986, his government
mustered the necessary two-thirds majority in the National Assembly to
amend the constitution and confirm the previous actions of the martial
law regime. The President then lifted martial law, and the opposition
parties took their elected seats in the National Assembly.

In July 1987, however,
after the government hastily pushed through a controversial legislative
bill to include military representation on local administrative
councils, the opposition walked out of Parliament. Passage of the bill
helped spark an opposition movement that quickly gathered momentum,
uniting Bangladesh's opposition parties for the first time. The
government began to arrest scores of opposition activists under the
country's Special Powers Act of 1974. Despite these arrests, opposition
parties continued to organize protest marches and nationwide strikes.
After declaring a state of emergency, Ershad dissolved Parliament and
scheduled fresh elections for March 1988.

All major opposition
parties refused government overtures to participate in these polls,
maintaining that the government was incapable of holding free and fair
elections. Despite the opposition boycott, the government proceeded.
The ruling Jatiya Party won 251 of the 300 seats. The Parliament, while
still regarded by the opposition as an illegitimate body, held its
sessions as scheduled, and passed a large number of bills, including,
in June 1988, a controversial constitutional amendment making Islam
Bangladesh's state religion and provision for setting up High Court
benches in major cities outside of Dhaka. While Islam remains the state
religion, the provision for decentralizing the High Court division has
been struck down by the Supreme Court.

By 1989, the domestic
political situation in the country seemed to have quieted. The local
council elections were generally considered by international observers
to have been less violent and more free and fair than previous
elections. However, opposition to Ershad's rule began to regain
momentum, escalating by the end of 1990 in frequent general strikes,
increased campus protests, public rallies, and a general disintegration
of law and order.

On December 6, 1990, Ershad
offered his resignation. On February 27, 1991, after 2 months of
widespread civil unrest, an interim government oversaw what most
observers believed to be the nation's most free and fair elections to
that date.

Khaleda Zia, 1991-96
The
center-right BNP won a plurality of seats and formed a government with
support from the Islamic fundamentalist party Jamaat-I-Islami, with
Khaleda Zia, widow of Ziaur Rahman, obtaining the post of prime
minister. Only four parties had more than 10 members elected to the
1991 Parliament: The BNP, led by Prime Minister Begum Khaleda Zia; the
AL, led by Sheikh Hasina; the Jamaat-I-Islami (JI), led by Golam Azam;
and the Jatiya Party (JP), led by acting chairman Mizanur Rahman
Choudhury while its founder, former President Ershad, served out a
prison sentence on corruption charges. The electorate approved still
more changes to the constitution, formally re-creating a parliamentary
system and returning governing power to the office of the prime
minister, as in Bangladesh's original 1972 constitution. In October
1991, members of Parliament elected a new head of state, President
Abdur Rahman Biswas.

In March 1994, controversy
over a parliamentary by-election, which the opposition claimed the
government had rigged, led to an indefinite boycott of Parliament by
the entire opposition. The opposition also began a program of repeated
general strikes to press its demand that Khaleda Zia's government
resign and a caretaker government supervise a general election. Efforts
to mediate the dispute, under the auspices of the Commonwealth
Secretariat, failed. After another attempt at a negotiated settlement
failed narrowly in late December 1994, the opposition resigned en masse
from Parliament. The opposition then continued a campaign of marches,
demonstrations, and strikes in an effort to force the government to
resign. The opposition, including the Awami League's Sheikh Hasina,
pledged to boycott national elections scheduled for February 15, 1996.

In February, Khaleda Zia
was re-elected by a landslide in voting boycotted and denounced as
unfair by the three main opposition parties. In March 1996, following
escalating political turmoil, the sitting Parliament enacted a
constitutional amendment to allow a neutral caretaker government to
assume power and conduct new parliamentary elections; former Chief
Justice Mohammed Habibur Rahman was named Chief Adviser (a position
equivalent to prime minister) in the interim government. New
parliamentary elections were held in June 1996 and were won by the
Awami League; party leader Sheikh Hasina became Prime Minister.

Sheikh Hasina, 1996-2001
Sheikh
Hasina formed what she called a "Government of National Consensus" in
June 1996, which included one minister from the Jatiya Party and
another from the Jatiyo Samajtantric Dal, a very small leftist party.
The Jatiya Party never entered into a formal coalition arrangement, and
party president H.M. Ershad withdrew his support from the government in
September 1997. Only three parties had more than 10 members elected to
the 1996 Parliament: The Awami League, BNP, and Jatiya Party. Jatiya
Party president, Ershad, was released from prison on bail in January
1997.

Although international and
domestic election observers found the June 1996 election free and fair,
the BNP protested alleged vote rigging by the Awami League. Ultimately,
however, the BNP party decided to join the new Parliament. The BNP soon
charged that police and Awami League activists were engaged in
largescale harassment and jailing of opposition activists. At the end
of 1996, the BNP staged a parliamentary walkout over this and other
grievances but returned in January 1997 under a four-point agreement
with the ruling party. The BNP asserted that this agreement was never
implemented and later staged another walkout in August 1997. The BNP
returned to Parliament under another agreement in March 1998.

In June 1999, the BNP and
other opposition parties again began to abstain from attending
Parliament. Opposition parties staged an increasing number of
nationwide general strikes, rising from 6 days of general strikes in
1997 to 27 days in 1999. A four-party opposition alliance formed at the
beginning of 1999 announced that it would boycott parliamentary
by-elections and local government elections unless the government took
steps demanded by the opposition to ensure electoral fairness. The
government did not take these steps, and the opposition subsequently
boycotted all elections, including municipal council elections in
February 1999, several parliamentary by-elections, and the Chittagong
city corporation elections in January 2000.

In July 2001, the Awami
League government stepped down to allow a caretaker government to
preside over parliamentary elections. Political violence that had
increased during the Awami League government's tenure continued to
increase through the summer in the run up to the election. In August,
Khaleda Zia and Sheikh Hasina agreed during a visit of former President
Jimmy Carter to respect the results of the election, join Parliament
win or lose, foreswear the use of hartals (violently enforced strikes)
as political tools, and if successful in forming a government allow for
a more meaningful role for the opposition in Parliament. The caretaker
government was successful in containing the violence, which allowed a
parliamentary general election to be successfully held on October 1,
2001.

Khaleda Zia, 2001-present
The
four-party alliance led by the BNP won over a two-thirds majority in
Parliament. Begum Khaleda Zia was sworn in on October 10, 2001 as the
Prime Minister of the Government of the People's Republic of Bangladesh
for the third time (first in 1991, second after the February 15, 1996
elections, and third after the 2001 elections).

Despite her August pledge
and all election monitoring groups declaring the election free and fair
(many going as far as labeling it the freest and fairest in
Bangladesh's history), Sheikh Hasina condemned the election and
disputed its results. Sheikh Hasina and the Awami League continue to
call for new elections and boycott Parliament, alleging the Khaleda Zia
government is using the police and security forces to persecute members
of the opposition. Sheikh Hasina, however, led her party legislators to
Parliament in 2002 and participated in the proceedings of the house.
The Awami League deputies walked out of the house in June 2003 to
protest what Awami League leaders said were derogatory remarks about
Hasina by a State Minister of the government and the partisan role of
the Speaker. They announced a boycott of the house until the government
and the Speaker met a set of their demands. In June 2004, however, the
Awami League legislators returned to Parliament without having any of
their demands met.

GOVERNMENT
The
president, while chief of state, holds a largely ceremonial post; the
real power is held by the prime minister, who is head of government.
The president is elected by the legislature (Parliament) every 5 years.
The president's normally circumscribed powers are substantially
expanded during the tenure of a caretaker government. (Under the 13th
Amendment, which the Parliament passed in March 1996, a caretaker
government assumes power temporarily to oversee general elections after
dissolution of the Parliament.) In the caretaker government, the
president has control over the Ministry of Defense, the authority to
declare a state of emergency, and the power to dismiss the Chief
Adviser and other members of the caretaker government. Once elections
have been held and a new government and Parliament are in place, the
president's powers and position revert to their largely ceremonial
role.

The prime minister is
appointed by the president; the prime minister must be a member of
Parliament (MP) whom the president feels commands the confidence of the
majority of other MPs. The cabinet is composed of ministers selected by
the prime minister and appointed by the president. At least 90% of the
ministers must be MPs. The other 10% may be non-MP experts or
"technocrats" who are not otherwise disqualified from being elected
MPs. According to the constitution, the president can dissolve
Parliament upon the written request of the prime minister.

The legislature is a
unicameral, 300-seat body. Its 300 members are elected by universal
suffrage at least every 5 years. Parliament amended the constitution in
May 2004, making a provision for adding 45 more seats reserved for
women and to be distributed among political parties in proportion to
their numerical strength in Parliament. These 45 new seats have yet to
be filled. The next general election is scheduled to take place in late
2006 or in early 2007.

Bangladesh's judiciary is a civil court
system based on the British model; the highest court of appeal is the
appellate court of the Supreme Court. At the local government level,
the country is divided into divisions, districts, subdistricts, unions,
and villages. Local officials are elected at the union level and
selected at the village level. All larger administrative units are run
by members of the civil service.

Principal Government Officials
President--Prof. Dr. Iajuddin Ahmed
Prime Minister--Begum Khaleda Zia
Foreign Minister--Manzur Morshed Khan
Ambassador to the United States--Syed Hasan Ahmad
Ambassador to the United Nations--Iftekhar Ahmed Chowdhury

Bangladesh maintains an embassy in the United States at 3510 International Drive NW, Washington, DC 20008 (tel: 202-244-0183; fax: 202-244-5366).

POLITICAL CONDITIONS
With
the easy access to international media and the expanding international
awareness of the country, democratic values are increasingly known in
Bangladesh. Regionally, India's progress in creating a viable and
decentralized democratic system is very visible in Bangladesh, as is
the negative example set in Pakistan with its current military rule.
Efforts by international organizations, other governments, and regional
trading partners to stress human rights and democracy are increasingly
coordinated and high profile. Yet reforms will largely come as a result
of internal demand for good governance and enlightened leadership.

Political developments in
Bangladesh also will affect the external environment. Northeast India,
Bangladesh, and Nepal represent a large portion of the hardcore poverty
in South Asia. With Maoist rebels gaining strength in Nepal,
insurgencies still bubbling in the northeastern states of India, and
the Communist Party of India/Marxist in West Bengal remaining firmly in
power, a major crisis in Bangladesh could add greatly to regional
instability. India would perhaps be the most affected by largescale
unrest on its northeast border, which also could complicate resolution
of issues in Pakistan and Afghanistan. Such a turn of events also would
be significant with respect to U.S. geopolitical interests in South
Asia.

In spite of its
shortcomings, Bangladesh is one of the most democratic states within
the Muslim world and a leading voice among the least developed
countries (LDCs). It also has taken on an increasingly active role in
international peacekeeping operations. Given the importance of
democracy for the advancement of LDCs, continuing to support the
development of democracy in Bangladesh should remain an international
priority.

ECONOMY
Although
one of the world's poorest and most densely populated countries,
Bangladesh has made major strides to meet the food needs of its
increasing population, through increased domestic production augmented
by imports. The land is devoted mainly to rice and jute cultivation,
although wheat production has increased in recent years; the country is
largely self-sufficient in rice production. Nonetheless, an estimated
10% to 15% of the population faces serious nutritional risk.
Bangladesh's predominantly agricultural economy depends heavily on an
erratic monsoonal cycle, with periodic flooding and drought. Although
improving, infrastructure to support transportation, communications,
and power supply is poorly developed. Bangladesh is limited in its
reserves of coal and oil, and its industrial base is weak. However, the
country's main endowments include its vast human resource base, rich
agricultural land, relatively abundant water, and substantial reserves
of natural gas.

Since independence in 1971, Bangladesh
has received more than $30 billion in grant aid and loan commitments
from foreign donors, about $15 billion of which has been disbursed.
Major donors include the World Bank, the Asian Development Bank, the UN
Development Program, the United States, Japan, Saudi Arabia, and west
European countries. Bangladesh historically has run a large trade
deficit, financed largely through aid receipts and remittances from
workers overseas. Foreign reserves dropped markedly in 2001 but appear
to have now stabilized in the $2.2 to $2.5 billion range (or about
2.0-2.2 monthly import cover).

Moves Toward a Market Economy
Following
the violent events of 1971 during the fight for independence,
Bangladesh--with the help of large infusions of donor relief and
development aid--slowly began to turn its attention to developing new
industrial capacity and rehabilitating its economy. The statist
economic model adopted by its early leadership, however--including the
nationalization of much of the industrial sector--resulted in
inefficiency and economic stagnation. Beginning in 1975, the government
gradually gave greater scope to private sector participation in the
economy, a pattern that has continued. A few state-owned enterprises
have been privatized, but many, including major portions of the banking
and jute sectors, remain under government control. Population growth,
inefficiency in the public sector, a resistance to developing the
country's richest natural resources, and limited capital have all
continued to restrict economic growth.

In the mid-1980s, there were
encouraging, if halting, signs of progress. Economic policies aimed at
encouraging private enterprise and investment, denationalizing public
industries, reinstating budgetary discipline, and liberalizing the
import regime were accelerated. From 1991 to 1993, the government
successfully followed an enhanced structural adjustment facility (ESAF)
with the International Monetary Fund (IMF) but failed to follow through
on reforms in large part because of a preoccupation with the
government's domestic political troubles. In the late 1990s the
government's economic policies became more entrenched, and some of the
early gains were lost, which was highlighted by a precipitous drop in
foreign direct investment in 2000 and 2001. The current government has
promised a return to liberalization. In June 2003 the IMF approved
3-year, $490-million plan as part of the Poverty Reduction and Growth
Facility (PRGF) for Bangladesh that aims to support the government's
economic reform program up to 2006. Seventy million dollars was made
available immediately. In the same vein the World Bank approved $536
million in interest-free loans.

Efforts to achieve Bangladesh's
macroeconomic goals have been problematic. The privatization of public
sector industries has proceeded at a slow pace--due in part to worker
unrest in affected industries--although on June 30, 2002, the
government took a bold step as it closed down the Adamjee Jute Mill,
the country’s largest and most costly state-owned enterprise. The
government also has proven unable to resist demands for wage hikes in
government-owned industries. Economic growth has been further slowed by
a largely dysfunctional banking system. This has impeded access to
capital. State-owned banks, which control about three-fourths of
deposits and loans, carry classified loan burdens of about 50%.

The IMF and World Bank
predict GDP growth over the next 5 years will be about 4.5%, well short
of the 7%-8% that they feel is needed to lift Bangladesh out of its
severe poverty. The post-September 11, 2001 global economic downturn
hit especially hard Bangladesh's main export industry--readymade
garments. As a result, exports, which were growing 18% annually, are
now growing 8%. Though the readymade garment industry is benefiting
from an early recovery in demand, it faces the loss of guaranteed
markets in the United States and elsewhere when quotas are abolished on
January 1, 2005. This will require Bangladesh to cut garment
manufacturing costs considerably if it is to remain competitive in the
world market. Foreign investors in a broad range of sectors are
increasingly frustrated with the politics of confrontation, the level
of corruption, and the slow pace of reform. Bangladesh may well lose
not only potential investors but also those already invested if
governance does not improve.

Agriculture
Most
Bangladeshis earn their living from agriculture. Although rice and jute
are the primary crops, wheat is assuming greater importance. Tea is
grown in the northeast. Because of Bangladesh's fertile soil and
normally ample water supply, rice can be grown and harvested three
times a year in many areas. Due to a number of factors, Bangladesh's
labor-intensive agriculture has achieved steady increases in food grain
production despite the often unfavorable weather conditions. These
include better flood control and irrigation, a generally more efficient
use of fertilizers, and the establishment of better distribution and
rural credit networks. With 26.25 million metric tons produced in
2002-03 (July-June), rice is Bangladesh's principal crop. By
comparison, wheat output in 2002 was 1.7 million metric tons.
Population pressure continues to place a severe burden on productive
capacity, creating a food deficit, especially of wheat. Foreign
assistance and commercial imports fill the gap. Underemployment remains
a serious problem, and a growing concern for Bangladesh's agricultural
sector will be its ability to absorb additional manpower. Finding
alternative sources of employment will continue to be a daunting
problem for future governments, particularly with the increasing
numbers of landless peasants who already account for about half the
rural labor force.

Industry and Investment
Fortunately
for Bangladesh, many new jobs--1.8 million, mostly for women--have been
created by the country's dynamic private readymade garment industry,
which grew at double-digit rates through most of the 1990s. The
labor-intensive process of shipbreaking for scrap has developed to the
point where it now meets most of Bangladesh's domestic steel needs.
Other industries include sugar, tea, leather goods, newsprint,
pharmaceutical, and fertilizer production. The country has done less
well, however, in expanding its export base--garments account for more
than three-fourths of all exports, dwarfing the country's historic cash
crop, jute, along with leather, shrimp, pharmaceuticals, and ceramics.

Despite the country's politically
motivated general strikes, poor infrastructure, and weak financial
system, Bangladeshi entrepreneurs have shown themselves adept at
competing in the global garments marketplace. Bangladesh exports
significant amounts of garments and knitwear to the U.S. and the
European Union (EU) market. As noted, the readymade garment industry
faces the loss of guaranteed markets in the United States and elsewhere
when quotas are abolished on January 1, 2005, which will require
Bangladesh to cut garment manufacturing costs considerably if it is to
remain competitive in the world market. Bangladesh has been a world
leader in its efforts to end the use of child labor in garment
factories. On July 4, 1995, the Bangladesh Garment Manufacturers Export
Association, International Labor Organization, and UNICEF signed a
memorandum of understanding on the elimination of child labor in the
garment sector. Implementation of this pioneering agreement began in
fall 1995, and by the end of 2001, child labor in the garment trade
virtually had been eliminated.

The Bangladesh Government continues to
court foreign investment, something it did fairly well in the 1990s in
private power generation and gas exploration and production, as well as
in other sectors such as cellular telephony, textiles, and
pharmaceuticals. In 1989, the same year it signed a bilateral
investment treaty with the United States, it established a board of
investment to simplify approval and start-up procedures for foreign
investors, although in practice the board has done little to increase
investment. Bangladesh also has established successful export
processing zones in Chittagong (1983), Dhaka (1994) and Comilla (2000),
and has given the private sector permission to build and operate
competing export promotion zones (EPZs).

The most important reforms Bangladesh
should make to be able to compete in a global economy are to privatize
the state-owned enterprises (SOEs), deregulate and promote foreign
investment in high-potential industries like energy and
telecommunications, and take decisive steps toward combating corruption
and strengthening rule of law.

DEFENSE
The
Bangladesh Army, Navy, and Air Force are composed of regular military
members. Some of the senior officers and noncommissioned officers
served in the Pakistan military before the 1971 independence war.
Senior officers include "repatriates" who were interned in Pakistan
during the war, and "freedom fighters" who fought against Pakistan. The
110,000-member, seven-division army is modeled and organized along
British lines, similar to other armies on the Indian subcontinent.
However, it has adopted U.S. Army tactical planning procedures,
training management techniques, and noncommissioned officer educational
systems. It also is eager to improve its peacekeeping operations
capabilities and is working with the U.S. military in that area. The
United States gave the Bangladesh Air Force four U.S. C-130 B transport
aircraft in 2001 under the excess defense article (EDA) program. These
aircraft will improve the military's disaster response and peacekeeping
capabilities. The Bangladesh Navy is mostly limited to coastal
patrolling, but in 2001 it paid to have an ULSAN-class frigate built in
South Korea.

In addition to traditional
defense roles, the military has been called on to provide support to
civil authorities for disaster relief and internal security. The
Bangladesh Air Force and Navy, with about 7,000 personnel each, perform
traditional military missions. A Coast Guard has been recently formed,
under the home ministry, to play a stronger role in the area of
anti-smuggling, anti-piracy, and protection of offshore resources.
Recognition of economic and fiscal constraints has led to the
establishment of several paramilitary and auxiliary forces, including
the 40,000-member Bangladesh rifles; the Ansars and village defense
parties organization, which claims 64 members in every village in the
country; and a 5,000-member specialized police unit known as the armed
police. Bangladesh rifles, under the authority of the home ministry,
are commanded by army officers who are seconded to the organization.

In addition to in-country
military training, some advanced and technical training is done abroad,
including grant aid training in the United States. China, Pakistan, and
eastern Europe are the major defense suppliers to Bangladesh, but
military leaders are trying to find affordable alternatives to Chinese
equipment.

A 2,300-member Bangladesh
Army contingent served with coalition forces during the 1991 Gulf war.
As of June 2003 Bangladesh was the third-leading contributor to UN
peacekeeping operations with a total of 2,642 troops, observers, and
military police. The highest contributions are to UNAMSIL (Sierra
Leone).

FOREIGN RELATIONS
Bangladesh
pursues a moderate foreign policy that places heavy reliance on
multinational diplomacy, especially at the United Nations.

Participation in Multilateral Organizations
Bangladesh
was admitted to the United Nations in 1974 and was elected to a
Security Council term in 1978 and again for a 2000-01 term. Foreign
Minister Choudhury served as president of the 41st UN General Assembly
in 1986. The government has participated in numerous international
conferences, especially those dealing with population, food,
development, and women's issues. In 1982-83, Bangladesh played a
constructive role as chairman of the "Group of 77," an informal
association encompassing most of the world's developing nations. It has
taken a leading role in the "Group of 48" developing countries and the
"Developing-8" group of countries.

Since 1975, Bangladesh has sought close
relations with other Islamic states and a role among moderate members
of the Organization of the Islamic Conference (OIC). In 1983,
Bangladesh hosted the foreign ministers meeting of the OIC. The
government also has pursued the expansion of cooperation among the
nations of South Asia, bringing the process--an initiative of former
President Ziaur Rahman--through its earliest, most tentative stages to
the formal inauguration of the South Asia Association for Regional
Cooperation (SAARC) at a summit gathering of South Asian leaders in
Dhaka in December 1985. Bangladesh has served in the chairmanship of
SAARC and has participated in a wide range of ongoing SAARC regional
activities.

In recent years, Bangladesh has played a
significant role in international peacekeeping activities. Several
thousand Bangladeshi military personnel are deployed overseas on
peacekeeping operations. Under UN auspices, Bangladeshi troops have
served or are serving in Sierra Leone, Somalia, Rwanda, Mozambique,
Kuwait, Ethiopia-Eritrea, Kosovo, East Timor, Georgia, Congo, Cote
d’Ivoire and Western Sahara, Bosnia, and Haiti. Bangladesh responded
quickly to President Clinton’s 1994 request for troops and police for
the multinational force for Haiti and provided the largest non-U.S.
contingent.

Bilateral Relations With Other Nations
Bangladesh
is bordered on the west, north, and east by a 2,400-kilometer land
frontier with India, and on the southeast by a land and water frontier
(193 kilometers) with Burma.

India. India is
Bangladesh's most important neighbor. Geographic, cultural, historic,
and commercial ties are strong, and both countries recognize the
importance of good relations. During and immediately after Bangladesh's
struggle for independence from Pakistan in 1971, India assisted
refugees from East Pakistan, intervened militarily to help bring about
the independence of Bangladesh, and furnished relief and reconstruction
aid.

Indo-Bangladesh relations
are often strained, and many Bangladeshis feel India likes to play "big
brother" to smaller neighbors, including Bangladesh. Bilateral
relations warmed in 1996, due to a softer Indian foreign policy and the
new Awami League government. A 30-year water-sharing agreement for the
Ganges River was signed in December 1996, after an earlier bilateral
water-sharing agreement for the Ganges River lapsed in 1988. Both
nations also have cooperated on the issue of flood warning and
preparedness. The Bangladesh government and tribal insurgents signed a
peace accord in December 1997, which allowed for the return of tribal
refugees who had fled into India, beginning in 1986, to escape violence
caused by an insurgency in their homeland in the Chittagong Hill
Tracts. The implementation of all parts of this agreement have stalled,
and the army maintains a very strong presence in the area. The army is
increasingly concerned about a growing problem of cultivation of
illegal drugs.

Pakistan. Bangladesh
enjoys warm relations with Pakistan, despite the strained early days of
their relationship. Landmarks in their reconciliation are:

• An August 1973 agreement between
  Bangladesh and Pakistan on the repatriation of numerous individuals,
  including 90,000 Pakistani prisoners of war stranded in Bangladesh as a
  result of the 1971 conflict;
  
  
• A February 1974 accord by
  Bangladesh and Pakistan on mutual recognition followed more than 2
  years later by establishment of formal diplomatic relations;
  
  
• The organization by the UN High
  Commissioner for Refugees (UNHCR) of an airlift that moved almost
  250,000 Bengalis from Pakistan to Bangladesh, and non-Bengalis from
  Bangladesh to Pakistan; and
  
  
• Exchanges of high-level visits,
  including a visit by Prime Minister Benazir Bhutto to Bangladesh in
  1989 and visits by Prime Minister Zia to Pakistan in 1992 and in 1995.

Still to be resolved are the division of
assets from the pre-1971 period and the status of more than 250,000
non-Bengali Muslims (known as "Biharis") remaining in Bangladesh but
seeking resettlement in Pakistan.

Burma. Bilateral
ties with Burma are good, despite occasional border strains and an
influx of more than 270,000 Muslim refugees (known as "Rohingya") from
predominantly Buddhist Burma. As a result of bilateral discussions, and
with the cooperation and assistance of the UNHCR, most of the Rohingya
refugees have now returned to Burma. As of 2003, about 20,000 refugees
remain in camps in southern Bangladesh.

Former Soviet Union.
The former Soviet Union supported India's actions during the 1971
Indo-Pakistan war and was among the first to recognize Bangladesh. The
U.S.S.R. initially contributed considerable relief and rehabilitation
aid to the new nation. After Sheikh Mujib was assassinated in 1975 and
replaced by military regimes, however, Soviet-Bangladesh relations
cooled.

In 1989, the U.S.S.R.
ranked 14th among aid donors to Bangladesh. The Soviets focused on the
development of electrical power, natural gas and oil, and maintained
active cultural relations with Bangladesh. They financed the Ghorasal
thermal power station--the largest in Bangladesh. Recently, Russia has
conducted an aggressive military sales effort in Dhaka and has
succeeded with a $124-million deal for eight MIG-29 fighters.
Bangladesh began to open diplomatic relations with the newly
independent Central Asian states in 1992.

China. China
traditionally has been more important to Bangladesh than the former
U.S.S.R., even though China supported Pakistan in 1971. As Bangladesh's
relations with the Soviet Union and India cooled in the mid-1970s, and
as Bangladesh and Pakistan became reconciled, China's relations with
Bangladesh grew warmer. An exchange of diplomatic missions in February
1976 followed an accord on recognition in late 1975.

Since that time, relations
have grown stronger, centering on trade, cultural activities, military
and civilian aid, and exchanges of high-level visits, beginning in
January 1977 with President Zia's trip to Beijing. The largest and most
visible symbol of bilateral amity is the Bangladesh-China "Friendship
Bridge," completed in 1989 near Dhaka, as well as the extensive
military hardware in the Bangladesh inventory and warm military
relations between the two countries. In the 1990s, the Chinese also
built two 210-megawatt power plants outside of Chittagong; mechanical
faults in the plants cause them to frequently shut down for days at a
time, heightening the country's power shortage.

Other countries in South Asia.

Bangladesh maintains friendly relations with Bhutan, Maldives, Nepal,
and Sri Lanka and strongly opposed the Soviet invasion of Afghanistan.
Bangladesh and Nepal recently agreed to facilitate land transit between
the two countries.

U.S.-BANGLADESH RELATIONS
Although
the U.S. relationship with Bangladesh was initially troubled because of
strong U.S. ties with Pakistan, U.S.-Bangladesh friendship and support
developed quickly following Bangladesh's independence from Pakistan in
1971.

U.S.-Bangladesh relations
are excellent. These relations were boosted in March 2000 when
President Clinton visited Bangladesh, the first visit ever by a sitting
U.S. President, and when Secretary of State Colin Powell visited in
June 2003 as well as when Secretary of Defense Donald Rumsfeld visited
in June 2004. A centerpiece of the bilateral relationship is a large
U.S. economic aid program, which totaled about $100 million in 2001.
U.S. economic and food aid programs, which began as emergency relief
following the 1971 war for independence, now concentrate on long-term
development. U.S. assistance objectives include stabilizing population
growth, protecting human health, encouraging broad-based economic
growth, and building democracy. In total, the United States has
provided more than $4.3 billion in food and development assistance to
Bangladesh. Food aid under Titles I, II, and III of PL-480
(congressional "food-for-peace" legislation) has been designed to help
Bangladesh meet minimum food requirements, promote food production, and
moderate fluctuation in consumer prices. Other U.S. development
assistance emphasizes family planning and health, agricultural
development, and rural employment. The United States works with other
donors and the Bangladesh Government to avoid duplication and ensure
that resources are used to maximum benefit.

Since 1986, with the
exception of 1988-89, when an aircraft purchase made the trade balance
even, the U.S. trade balance with Bangladesh has been negative, due
largely to growing imports of readymade garments. Jute carpetbacking is
the other major U.S. import from Bangladesh. Total imports from
Bangladesh were about $2 billion (excluding services) in 2003, down
from the $2.1 billion in 2002. U.S. exports to Bangladesh (some $226
million, excluding services in 2003) include wheat, fertilizer, cotton,
communications equipment, aircraft, and medical supplies, a portion of
which is financed by the U.S. Agency for International Development (USAID). A bilateral investment treaty was signed in 1989.

Another trade related issue between the
two countries involves the export processing zones (EPZs) The BDG
provides several tax, foreign exchange, customs and labor incentives to
investors in the EPZs. One such incentive provided in recent years was
an exemption from certain labor laws, which had the practical effect of
prohibiting trade unions from the zones. The U.S. Generalized System of
Preferences (GSP) law requires the beneficiary country to satisfy
certain conditions relating to labor rights. On July 13, 2004, the BDG
passed a bill allowing limited trade unionism in the EPZs effective
November 1, 2006; whether this has preserved Bangladesh’s GSP benefits
remains unclear as of July 2004 but nonetheless demonstrates the
strength and importance of ties between Bangladesh and the U.S.

Relations between
Bangladesh and the United States were further strengthened by the
participation of Bangladesh troops in the 1991 Gulf war coalition, and
alongside U.S. forces in numerous UN peacekeeping operations, including
Haiti in 1994, as well as by the assistance of a U.S. naval task force
after a disastrous March 1991 cyclone in Bangladesh. The relief efforts
of U.S. troops are credited with having saved as many as 200,000 lives.
In response to Bangladesh's worst flooding of the century in 1998, the
United States donated 700,000 metric tons of food grains, helping to
mitigate shortages.

Most recently, Bangladesh
has become a valuable United States ally in the Global War on
Terrorism. As part of the war effort, the government of Bangladesh has
publicly addressed problems of money laundering, weak border controls,
and other factors to ensure that Bangladesh does not become a terrorist
safe-haven.

Principal U.S. Officials
Ambassador--Harry K. Thomas, Jr.
Deputy Chief of Mission--Judy Chammas
Political-Economic Officer--Dundas McCullough
Commercial Officer--David Renz
Consular Officer-- Betsy Gourlay
Management Officer--Vince Raimondi
Regional Security Officer--David Zebley
Public Affairs Officer--Not yet named

The U.S. Embassy in Dhaka
is located at Madani Avenue, Baridhara, Dhaka 1212, Bangladesh; tel:
(880) (2) 885-5500, fax: (880) (2) 8823744. Hours of Operation: Sunday
to Thursday (08:00 a.m.-16:30 p.m.), except holidays.

TRAVEL AND BUSINESS INFORMATION
The
U.S. Department of State's Consular Information Program provides
Consular Information Sheets, Travel Warnings, and Public Announcements.
Consular Information Sheets exist for all countries and include
information on entry requirements, currency regulations, health
conditions, areas of instability, crime and security, political
disturbances, and the addresses of the U.S. posts in the country. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Public Announcements

are issued as a means to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas
that pose significant risks to the security of American travelers. Free
copies of this information are available by calling the Bureau of
Consular Affairs at 202-647-5225 or via the fax-on-demand system:
202-647-3000. Consular Information Sheets and Travel Warnings also are
available on the Consular Affairs Internet home page: http://travel.state.gov.
Consular Affairs Tips for Travelers publication series, which contain
information on obtaining passports and planning a safe trip abroad, are
on the Internet and hard copies can be purchased from the
Superintendent of Documents, U.S. Government Printing Office,
telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning
Americans traveling abroad may be obtained from the Office of Overseas
Citizens Services at (202) 647-5225. For after-hours emergencies,
Sundays and holidays, call 202-647-4000.

The National Passport Information Center
(NPIC) is the U.S. Department of State's single, centralized public
contact center for U.S. passport information. Telephone: 1-877-4USA-PPT
(1-877-487-2778). Customer service representatives and operators for
TDD/TTY are available Monday-Friday, 8:00 a.m. to 8:00 p.m., Eastern
Time, excluding federal holidays.

Travelers can check the latest health
information with the U.S. Centers for Disease Control and Prevention in
Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web
site at http://www.cdc.gov/travel/index.htm
give the most recent health advisories, immunization recommendations or
requirements, and advice on food and drinking water safety for regions
and countries. A booklet entitled Health Information for International
Travel (HHS publication number CDC-95-8280) is available from the U.S.
Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa
requirements, currency and customs regulations, legal holidays, and
other items of interest to travelers also may be obtained before your
departure from a country's embassy and/or consulates in the U.S. (for
this country, see "Principal Government Officials" listing in this
publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register their travel via the State Department’s travel registration web site at https://travelregistration.state.gov

or at the Consular section of the U.S. embassy upon arrival in a
country by filling out a short form and sending in a copy of their
passports. This may help family members contact you in case of an
emergency.


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