US embassy cable - 05DHAKA2748

C O N F I D E N T I A L DHAKA 002748 
 
SIPDIS 
 
E.O. 12958: DECL: 06/13/2010 
TAGS: EFIN, PGOV, EAID, BG 
SUBJECT: AMBASSADOR PAYS FAREWELL CALL ON FINANCE MINISTER 
 
Classified By: P/E Counselor D.C. McCullough, reason para 1.4 b. 
 
1. (SBU) On June 12, Ambassador called on Finance Minister 
Saifur Rahman to discuss the latter's recent trip to 
Washington and other issues.  He was accompanied by USAID 
Director George and econoff (notetaker).  Septel reports 
Rahman's comments on the new BDG budget. 
 
2. (C) Noting that he would soon be departing post, the 
Ambassador thanked Rahman for his support and cooperation on 
key issues over the past two years.  Rahman wished the 
Ambassador well, and expressed appreciation for his help in 
setting up a productive series of meetings for Rahman's 
recent visit to Washington. 
 
3. (C) Rahman highlighted as particularly important his 
meeting with new World Bank President Paul Wolfowitz, who he 
said was in a "listening mode" that allowed Rahman to explain 
fully his perspectives on Bangladesh.  Rahman added that 
opposition Awami League president Sheikh Hasina had sent a 
letter to Wolfowitz listing alleged human rights abuses in 
Bangladesh and urging the Bank to support her call for an 
early national election and reforms in the caretaker 
government system.  Such letters, Rahman complained, 
discredit Bangladesh and undermine BDG efforts to promote 
development. 
 
4. (SBU) Ambassador asked about BDG progress on issuing 
municipal bonds, and cited a December 2004 seminar that 
discussed the advantages of bonds for generating revenue at 
the municipal level.  The BDG, he observed, is heavily 
centralized, in part because local governments have no 
independent revenue.  He encouraged the minister to implement 
a pilot bond program in two localities, one urban and one 
rural.  Rahman undertook to pursue the matter with World Bank 
Country Director Wallich. 
 
5.  (C) USAID Director acknowledged the BDG's acute interest 
in qualifying for the Millennium Challenge Account (MCA). 
While Bangladesh has made significant strides in most areas 
of MCA concern, especially in human development and 
education, he said,  corruption remains an over-riding 
obstacle for Bangladesh.  The BDG could boost its case by 
demonstrating strong, effective action against corruption. 
He encouraged Rahman to work with the USG on developing 
strategies and mechanisms to combat corruption. 
 
6.  (C) Turning to the new but troubled Anti-Corruption 
Commission (ACC), USAID Director expressed concern over its 
slow start and its lack of enforcement authority.  Rahman 
agreed that the ACC has not functioned as hoped but said he 
has organized a high-level BDG meeting to discuss the role of 
the ACC and identify ways to give the ACC "some teeth."  He 
asked the USG for resources and technology to build 
enforcement and regulatory capacity in the ACC. 
THOMAS