Bangladesh

Politics:

• Analysis

  Bangladesh politics: Another kind of crime

  Justice in Bangladesh: Another kind of crime

  Bangladesh's war-crimes tribunal is sullying its judicial and political systems

  IN 1961 Israel kidnapped Adolf Eichmann from Argentina and put him on trial for crimes committed 20 years earlier. Eichmann had been secretary at the Nazis' Wannsee conference that led to the Holocaust. His trial in Jerusalem was a model of meticulous process. The prosecutor was Israel's attorney-general; the defence lawyer, a leading German attorney; the proceedings were broadcast. They were everything the Holocaust was not: open, subject to evidence and challenge, and legal.

  Now consider the trials under way at the International Crimes Tribunal in Dhaka, the capital of Bangladesh. There too, men are being tried for dreadful crimes committed many years ago, in this case in 1971, during Bangladesh's war of independence from Pakistan. The defendants have been accused of genocide, mass murder, mass rape and attempting to exterminate whole groups of people. But their trials have fallen a long way short of Israel's model of due process.

  The government has interfered in the court's deliberations. Public discussion of the proceedings has been restricted. The number of defence witnesses was curtailed. One was even kidnapped on the steps of the court. In one case, the presiding judge resigned and the death sentence was handed down by three men who had not heard all the witnesses. In another, the defendant was represented by a lawyer who did not have nearly enough time to prepare a case. That also ended in a death sentence. These are profound judicial failings, falling short not only of the standards of the Eichmann trial but also of the requirements of Bangladeshi law. They contradict repeated government assurances that the trials would be models of judicial process.

  The ostensible and laudable aim of these trials was to help Bangladesh come to terms with its past by bringing to justice those responsible for the crimes that marred the nation's birth. By this measure, the trials have been an utter failure. Because most of the accused are linked to Jamaat-e-Islami, an Islamist group allied to the main opposition party, the court process has become enmeshed within the country's internecine politics. Jamaat thugs with home-made bombs have gone on the rampage; police have fought running battles with mobs; dozens have died. Bangladesh is descending into a spiral of intolerance. The government talks of banning Jamaat; the opposition is becoming more aggressively Islamist; rumours are spreading that an election due this year may be postponed.

  The poisoned well

  Sadly, most Bangladeshis are cheering on the tribunal's flawed proceedings. When the court passed a life sentence (rather than a death sentence), the crowds that gathered to protest against this leniency were the biggest that had been seen in Dhaka for 20 years. Now the government wants to rewrite the law to allow death sentences to be applied retrospectively. Few seem to care a jot for due process; rather, everybody thinks that the defendants are getting their just deserts.

  The Economist has no sympathy for the views of Jamaat or its backers. But justice does not exist solely for those with a particular approved outlook. As the Eichmann trial demonstrated, due process is essential to provide true justice to the victims of genocide. Eventually Bangladeshis will also come to recognise this and demand a proper accounting. But by then it will be too late. The war-crimes tribunal is poisoning the well from which Bangladesh will one day want to drink.

  March 23, 2013

• Background

  Bangladesh: Political forces at a glance

  Present government: Politics in Bangladesh will continue to be dominated by the two main political parties, the Awami League (AL), led by Sheikh Hasina Wajed, and the Bangladesh Nationalist Party (BNP), headed by Khaleda Zia. The AL won a landslide victory in the December 2008 general election, which followed nearly two years of rule by a military-backed caretaker government. The AL currently controls three-quarters of the seats in parliament, allowing it to govern without the support of any of the other members of the Grand Alliance (the grouping of 14 political parties that it leads). However, Sheikh Hasina has chosen to include members of the alliance in the cabinet. The second-largest member of the Grand Alliance is the Jatiya Party, which is led by a deposed former president, Hossain Mohammad Ershad. This party has suffered several damaging splits since 1997 because of its alternating support for the AL and the BNP.

  Political scene to be dominated by long standing rivals

  The BNP was founded by Lieutenant General Ziaur Rahman in 1978, and has been led by Mrs Zia since General Zia was assassinated in 1981. The party suffered a serious split in 2007 following Mrs Zia's arrest on corruption charges, when one faction grouped behind a long-standing Zia loyalist, Khondoker Delwar Hossain, while another, which favoured a change of leadership, rallied behind Hafiz Uddin Ahmed, one of the BNP's longest-serving lawmakers. In June 2008 the two wings decided to reunite in a bid to put pressure on the caretaker government to release Mrs Zia and to try to ensure that the BNP retained a chance of challenging the AL in the parliamentary election planned for December 2008. During the forecast period (2010-14) the BNP is unlikely to increase its representation from its current meagre tally of 30 seats. The party is expected to boycott parliament intermittently and to organise hartals (mass strikes involving street protests) in its bid to destabilise the government. The  BNP espouses Bangladeshi nationalism with anti-Indian and pro-Islamic nuances.

  Parliamentary forces, May 2010
  (no. of seats in Jatiya Sangsad)
  Grand Alliance (14-party governing coalition)	263
  Awami League	230
  Jatiya Party (Ershad)	27
  Jatiya Samajtantrik Dal (JSD)	3
  Workers Party of Bangladesh	2
  Liberal Democratic Party	1
  Opposition alliance	33
  Bangladesh Nationalist Party (BNP)	30
  Jamaat-e-Islami	2
  Bangladesh Jatiya Party (BJP)	1
  Independents	4
  Total	300
  Source: Election Commission.

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  Next elections: Bangladesh operates a unique system for preparing for parliamentary elections. At the end of a government's term in office, a caretaker government takes over to administer a general election, which must be held within 90 days of the appointment of the interim administration. The AL-led government is expected to hand over power to a caretaker government in January 2014, and under the constitution the next parliamentary election must be held by April of that year.

  May 17, 2010

• Structure

  Bangladesh: Political structure

  Official name

  People's Republic of Bangladesh

  Form of government

  Bangladesh has been a parliamentary democracy since a constitutional amendment in 1991

  The executive

  The prime minister is chief executive and head of the Council of Ministers (the cabinet), which she selects; the presidency is a largely ceremonial role, although the president appoints members of the cabinet and the judiciary and has the power to dissolve parliament

  National legislature

  A unicameral parliament, consisting of 300 seats occupied by members directly elected from geographical constituencies for five-year terms, plus 45 seats reserved for women elected by members of parliament

  National elections

  The most recent general election was held in December 2008. Governments serve maximum terms of five years. The next general election is due to take place by January 2014

  National government

  An alliance headed by the Awami League (AL) won more than two-thirds of the seats in parliament at the December 2008 election, which was overseen by a non-partisan caretaker government. The AL dominates the alliance, and has a two-thirds majority in parliament in its own right. Four other parties in the alliance also won seats: the Jatiya Party is the AL's largest coalition partner, while the Jatiya Samajtantrik Dal (JSD), the Workers Party of Bangladesh and the Liberal Democratic Party (LDP) complete the government

  Main political organisations

  AL; Jatiya Party; JSD; Workers Party of Bangladesh; LDP; Bangladesh Nationalist Party (BNP); Jamaat-e-Islami; Bangladesh Jatiya Party (BJP)

  Key ministers

  President: Zillur Rahman

  Prime minister: Sheikh Hasina Wajed

  Agriculture: Motia Chowdhury

  Civil aviation & tourism: Faruk Khan

  Commerce: Ghulam Quadar

  Communication: Obaidul Quader

  Education: Nurul Islam Nahid

  Finance: Abdul Maal Abdul Muhith

  Fisheries & livestock: Abdul Latif Biswash

  Food: Abdur Razzakque

  Foreign affairs: Dipu Moni

  Home affairs: Mohiuddin Khan Alamgir

  Industries: Dilip Barua

  Labour & employment: Rajiuddin Raju

  Law, justice & parliamentary affairs: Shafique Ahmed

  Local government & rural development: Syed Ashraful Islam

  Planning: A K Khandaker

  Shipping & inland water transport: Shahjahan Khan

  Textile & jute industry: Abdul Latif Siddiqui

  Water resources: Ramesh Chandra Sen

  Central bank governor

  Atiur Rahman

  March 19, 2013

• Outlook

  Bangladesh: Key developments

  Outlook for 2013-17

  • The leftward-leaning Awami League (AL) is expected to complete its five-year governmental term, having won a huge majority at the 2008 general election. The next parliamentary poll must be held by January 2014.
  • With further convictions expected to be handed down by Bangladesh's war crimes tribunal, social unrest will continue, but the Economist Intelligence Unit expects the security forces to maintain basic law and order.
  • There is a risk of political instability should the main opposition Bangladesh Nationalist Party (BNP) go ahead with its threat to boycott the next election, as such a move would undermine the credibility of the resulting government.
  • The fiscal position will remain weak in the forecast period, as the authorities step up efforts to implement a wide range of development projects aimed at improving infrastructure and alleviating poverty.
  • The economy is forecast to remain on a sustainable growth path, expanding at an average annual rate of 6.4% in fiscal years 2012/13-2016/17 (July-June).
  • Annual inflation is forecast to moderate to 7.6% on average in 2013-17, from 8.7% in 2012. However, inclement weather could result in a much faster pace of acceleration in food price inflation than we currently forecast.
  • The current-account position will weaken in 2013-17 as the trade account continues to record large deficits. However, sustained inflows of workers' remittances will partially offset the weak trade balance.

  Review

  • A recent opinion poll published by the Daily Star newspaper indicated that undecided voters might have a disproportionately great influence over the outcome of the next poll.
  • A wave of violent protests, sparked by the sentencing of a senior leader of the Jamaat-e-Islami party, Delwar Hossain Sayeedi, by a domestic war crimes court in February, has left at least 72 people dead.
  • The Indian president, Pranab Mukherjee, made a trip to Bangladesh on March 3rd-5th; it was the first such visit by an Indian head of state in almost four decades. However, no new bilateral agreements were forthcoming.
  • The rate of consumer price inflation slowed to 7.4% year on year in January, from 7.7% in December.
  • According to data published by the Export Promotion Bureau, the value of merchandise exports rose by 8.8% year on year in the first seven months of the current fiscal year, to US$15.2bn.
  • Workers' remittances grew by 2% year on year in February, to US$1.2bn.

  March 19, 2013

Economy:

• Background

  Bangladesh: Country fact sheet

  Fact sheet

  Annual data	2012a	Historical averages (%)	2008-12
  Population (m)	152.6	Population growth	1.2
  GDP (US$ bn; market exchange rate)	115.6b	Real GDP growth	6.2
  GDP (US$ bn; purchasing power parity)	290	Real domestic demand growth	5.9
  GDP per head (US$; market exchange rate)	758	Inflation	8.4
  GDP per head (US$; purchasing power parity)	1,901	Current-account balance (% of GDP)	1.6
  Exchange rate (av) Tk:US$	81.84b	FDI inflows (% of GDP)	0.9
  a The Economist Intelligence Unit estimates. b Actual.

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  Background: The eastern part of Bengal became part of Pakistan with the end of British rule in India in 1947. In 1970 Sheikh Mujibur Rahman led the Awami League (AL) to an election victory in East Pakistan (the future Bangladesh) and demanded a loose federation with the richer and more powerful West Pakistan. In March 1971 separatist forces declared independence, and a civil war broke out. This was eventually won by the Bengali freedom fighters, with the aid of the Indian military, in December of that year. Bangladesh was ruled by a military-backed caretaker government for almost two years from January 2007, following the cancellation of the parliamentary election in that month as the internal security situation deteriorated. A general election was held in December 2008, returning the country to rule by a democratically elected government.

  Political structure: Bangladesh is a parliamentary democracy, with universal suffrage. Governments serve a maximum term of five years. The Jatiya Sangsad (parliament) is a unicameral legislature with 300 directly elected members. Laws are passed by simple majority, but constitutional amendments require a two-thirds majority. The 14th amendment to the constitution, passed in 2004, reserves 45 seats for women. An alliance headed by the AL won more than two-thirds of the seats in the legislature at the 2008 election. The opposition alliance, led by the Bangladesh Nationalist Party, holds only 31 seats. The next parliamentary poll must be held by January 2014.

  Policy issues: Bangladesh has pursued market-oriented policies since the mid-1970s, and this policy stance is expected to be maintained by the current, AL-led government throughout its term of office. The government's main priorities include alleviating poverty, expanding national power-generating capacity and improving price stability. Assistance from bilateral and multilateral donors will be crucial to achieving these policy objectives in the short to medium term.

  Taxation: Owing to the narrow nature of the tax base, revenue is generated largely by customs and excise. Personal income is subject to progressive taxation, and corporation tax varies between 25% and 45%.

  Foreign trade: Merchandise exports increased to US$24.6bn in 2011, from US$19.2bn in 2010. Imports grew at a much faster pace, to reach US$32.6bn, resulting in a trade deficit of US$8bn in 2011.

  Major exports 2012	% of total	Major imports 2012	% of total
  Readymade garments	67.8	Petroleum products	14.7
  Fish & prawns	3.1	Textiles	8.9
  Leather & hides	2.5	Iron & steel	6.6
  Jute products	2.1	Capital machinery	5.4
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  US	19.7	India	18.2
  Germany	16.1	China	13.5
  UK	9.5	Kuwait	4.9
  France	7.2	Singapore	4.0

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  March 20, 2013

• Structure

  Bangladesh: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 19, 2013

• Outlook

  Bangladesh: Country outlook

  Bangladesh: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The political scene will be dominated in the short term by preparations for the next election, which must be held by January 2014. Political stability could come under severe pressure if the main opposition Bangladesh Nationalist Party (BNP) goes ahead with its threat to boycott the poll. The ultimatum is part of a long-standing disagreement between the BNP and the ruling Awami League (AL) over how the election should be conducted. For the past two decades preparations for parliamentary polls have been overseen by non-partisan caretaker governments. The AL and the BNP formerly agreed that the system was necessary to ensure free and fair elections, after a period of military dictatorships in the 1970s and 1980s. However, following a Supreme Court ruling in 2011 that deemed the arrangement invalid, the AL won parliamentary approval for a constitutional amendment abolishing the system. The BNP is opposed to the ending of the caretaker-government arrangement, as it believes that any election overseen by the AL administration will be flawed.

  ELECTION WATCH: The next election must be held by January 2014. In a departure from the system employed for previous national polls following an amendment to the constitution in 2011, the government will not hand over power to a caretaker administration at the end of its term but instead will oversee the election itself. Should the BNP boycott the next parliamentary poll, as it has threatened to do, this would raise doubts about the contest's legitimacy and the validity of its outcome. The AL is determined to be the first party in Bangladesh to win a second consecutive term of office. Its chances of securing victory will depend on whether voters feel that it has delivered on its election promises. One such pledge was to increase power-generating capacity. Although capacity has increased since the AL took office in early 2009, demand continues to exceed supply by a considerable margin. The next presidential election is due in 2014; the president is selected by the country's members of parliament, and the post usually goes to the government's preferred candidate.

  INTERNATIONAL RELATIONS: Bangladesh's foreign policy will remain focused on improving economic and diplomatic ties with India and China. Relations with India have improved dramatically since the AL came to power. Economic and political ties have deepened since visits by India's prime minister, Manmohan Singh, in 2011 and by its president, Pranab Mukherjee, in early March 2013. The latter's visit was the first by an Indian head of state in almost four decades. There are concerns, however, that a BNP government may not enjoy the same kind of cordial relationship with India's administration as the AL enjoys. The AL and the BNP differ slightly on foreign policy: the latter harbours nationalistic tendencies, and this might get hamper warm relations with India. Relations between the BNP and India's main opposition Bharatiya Janata Party have traditionally been tense and are likely to remain difficult.

  POLICY TRENDS: In the early part of the forecast period the authorities will make headway towards the UN's Millennium Development Goals, the deadline for the achievement of which is 2015. The government will also achieve progress on meeting the conditions of a US$987m IMF loan agreed in early 2012, one of which is that it must tackle its huge fuel-subsidy bill. Another challenge will be to improve the supply of electricity. The main obstacles in this regard are a shortage of gas (the main fuel used by generating plants in Bangladesh) and the large number of old, inefficient power stations. A number of advances will be made, but electricity supplies are unlikely to improve significantly in the forecast period.

  ECONOMIC GROWTH: We expect Bangladesh to remain on a trajectory of strong economic growth in fiscal year 2012/13-2016/17 (July-June), when we forecast that real GDP will expand by 6.4% a year on average. Growth will continue to be supported by steady rises in private consumption and investment. One of the main determinants of private consumption growth in the forecast period will be the performance of the agricultural sector, while another will be remittances from the country's diaspora and from Bangladeshis working abroad.

  INFLATION: Assuming that rainfall is close to normal, annual inflation is forecast to moderate to 7.6% on average in 2013-17, from 8.7% in 2012. The upward pressure on prices exerted by the weak exchange rate is expected to be less pronounced in 2013-17 than last year, when the taka depreciated by 9.4% against the US dollar. However, there are significant upside risks to our inflation forecast. Food prices will continue to have a heavy weighting in the consumer price index, and consumer prices could therefore increase much faster than expected if inclement weather reduces the size of harvests, either in Bangladesh or elsewhere. Local food prices will also be influenced by global prices for fossil fuels, and particularly gas, as most farmers in Bangladesh will continue to rely on chemical fertiliser (whose manufacture uses large amounts of natural gas) to maximise their crop yields.

  EXCHANGE RATES: We forecast that the taka will depreciate gradually against the US dollar in the next five years, from an average of Tk81.8:US$1 in 2012 to Tk95.2:US$1 by 2017. A deterioration in the current-account position, stemming from strong import growth, is expected to exert downward pressure on the local currency. In April 2012 the IMF approved a US$987m loan to Bangladesh, and this has helped to shore up confidence in the taka, as the resulting increase in foreign-exchange reserves has enhanced the ability of Bangladesh Bank (BB, the central bank) to intervene in the markets to prevent erratic movements in the currency's value. The central bank moved away from targeting a specific exchange rate at the start of 2012, but it will remain committed to maintaining a managed flexible exchange-rate regime. BB is expected to confine its intervention to moves aimed at countering volatility and ensuring that foreign-exchange reserves remain sufficient.

  EXTERNAL SECTOR: The current-account position is expected to weaken in 2013-17 relative to 2012, reflecting a forecast increase in the trade deficit and persistent shortfalls on the services and income accounts. The current-account surplus is expected to narrow to the equivalent of 0.1% of nominal GDP in 2013, from an estimated 0.6% in 2012. The current account is forecast to record deficits from 2014 onwards, amid rising global oil prices. Remittance inflows will remain an important feature of the current account, as they will continue to make up the bulk of inward transfers and will be equal to around 10% of nominal GDP.

  March 25, 2013

• Forecast

  Bangladesh: Country forecast summary

  Country forecast overview: Highlights

  • The Awami League (AL) is expected to complete its five-year governmental term, having won a huge majority at the 2008 general election. The next parliamentary poll must be held by January 2014. There is a risk of political instability should the main opposition Bangladesh Nationalist Party (BNP) boycott the election.
  • The opposition will continue to use hartals (mass strikes involving street protests) as a means of expressing its dissatisfaction with the government in the period leading up to the next election. The frequency of hartals has increased in recent weeks in response to verdicts reached by the war crimes tribunal: supporters of those found guilty have been protesting against the court's decisions, while secular elements have demanded tougher sentences. Social unrest will remain a feature of political scene, but the Economist Intelligence Unit expects the security forces to maintain basic law and order.
  • Bangladesh's foreign policy will remain focused on strengthening economic and diplomatic ties with India and China. Relations with India have improved dramatically since the AL took office. Political and economic ties have deepened following visits to Bangladesh by India's prime minister, Manmohan Singh, in 2011 and its president, Pranab Mukherjee, in early March 2013.
  • Despite a gradual increase in electricity generation, demand for power will continue to outstrip supply, and load-shedding (planned power rationing) will remain common practice in 2013-17. In general, the government is expected to pursue business-friendly policies during the forecast period.
  • The Economist Intelligence Unit forecasts that the economy will remain on a sustainable growth trajectory, expanding by an average of 6.4% a year in fiscal years 2012/13-2016/17 (July-June). Growth will be supported by increases in private consumption and investment. The economy will continue to be heavily dependent on the agricultural sector (which underpins private consumption) and the textile industry (which accounts for the bulk of exports). Workers' remittances will remain an important engine of private consumption growth and will be equivalent to around 10% of nominal GDP on average in the forecast period.
  • Stronger growth in private consumption and investment will boost demand for a range of imports in the forecast period. The widening trade deficit will be the main factor behind a marked deterioration the current-account position.

  Country forecast overview: Key indicators

  Key indicators	2012	2013	2014	2015	2016	2017
  Real GDP growth (%)	6.3	6.1	6.3	6.4	6.5	6.5
  Consumer price inflation (av; %)	8.7	8.5	7.0	7.7	7.4	7.5
  Budget balance (% of GDP)	-5.1	-5.4	-5.3	-5.3	-5.2	-4.8
  Current-account balance (% of GDP)	0.6	0.1	-0.6	-0.7	-1.0	-1.1
  Exchange rate Tk:US$ (av)	81.84	81.84	84.05	87.00	92.43	94.23
  Exchange rate Tk:€ (av)	105.21	108.84	110.32	110.49	116.46	118.85

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  March 20, 2013

View detailed map

Country Briefing

Land area

147,570 sq km

Population

150.5m (mid-2011 IMF estimate)

Main towns

Population in '000 (2006 government estimate):

 Dhaka (capital): 11,814

 Chittagong: 3,588

 Khulna: 1,323

 Rajshahi: 737

Climate

Tropical monsoon

Weather in Dhaka (altitude 3 metres)

Hottest month, July, 23-35°C (average daily minimum and maximum); coldest month, January, 11-28°C; driest months, December and January, 5 mm average monthly rainfall; wettest month, July, 567 mm average monthly rainfall

Languages

Bengali; Urdu and Hindi are minority languages, and English is also used

Religion

Muslim (89.7% in 2001 census); Hindu (9.2%); Buddhist (0.7%); Christian (0.3%); others (0.1%)

Measures

Imperial system. Local measures include: 1 tola = 11.66 g; 1 seer = 80 tolas = 932 g; 1 maund = 40 seers = 37.29 kg

Numbers are commonly expressed in chores and lakhs; 1 crore = 10m, written 1,00,00,000; 1 lakh = 100,000, written 1,00,000

Currency

Taka (Tk); Tk1 = 100 paisa. Average exchange rate in 2011: Tk74.2:US$1

Fiscal year

July 1st-June 30th

Time

6 hours ahead of GMT

Public holidays

January 1st (New Year's Day); January 24th (Birth of the Prophet); February 21st (International Mother Language Day); March 26th (Independence Day); April 14th (Bengali New Year); May 1st (Labour Day); August 8th (Eid al-Fitr); August 15th (National Mourning Day); October 14th (Durga Puja); October 15th (Eid al-Adha); November 7th (National Revolution Day); December 16th (Victory Day); December 25th (Christmas Day); December 31st (Bank Holiday); plus religious holidays that depend on lunar sightings and optional holidays for various religious groups

January 22, 2013