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Economy of Bangladesh

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. 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 stabilized in the $3 to $4 billion range (or about 3 months' import cover). In January 2007, reserves stood at $3.74 billion, and they increased to $5.39 billion by January 2008, according to the Bank of Bangladesh, the central bank.

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 static 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 late 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, 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 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. In June 2003 the IMF approved 3-year, $490-million plan as part of the Poverty Reduction and Growth Facility (PRGF) for Bangladesh that aimed 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. Access to capital is impeded. 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 6.0%, well short of the 8%-9% needed to lift Bangladesh out of its severe poverty. The initial impact of the end of quotas under the Multi-Fiber Arrangement has been positive for Bangladesh, with continuing investment in the ready-made garment sector, which has experienced annual export growth of around 20%. Downward price pressure means Bangladesh must continue to cut final delivered costs 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. While investors view favorably recent steps by the interim government to address corruption, governance, and infrastructure issues, most believe it is too early to assess the long-term impact of these developments.

Agriculture

Most Bangladeshis earn their living from agriculture. Although rice and jute are the primary crops, maize and vegetables are assuming greater importance. Due to the expansion of irrigation networks, some wheat producers have switched to cultivation of maize which is used mostly as poultry feed. 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 28.8 million metric tons produced in 2005-2006 (July-June), rice is Bangladesh's principal crop. By comparison, wheat output in 2005-2006 was 9 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 ready-made garment industry, which grew at double-digit rates through most of the 1990s. The labor-intensive process of ship-breaking 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 initial impact of the end of quotas on Bangladesh's ready-made garment industry has been positive. Downward price pressures, however, mean Bangladesh must continue to cut final delivered costs if it is to remain competitive in the world market.

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 export processing zones in Chittagong (1983), Dhaka (1994), Comilla (2000), Mongla (2001), Iswardi (2005), Uttara (2006), and Karnafully (2007).

The most important reforms Bangladesh should make to be able to compete in a global economy are to privatize 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.

Fiscal year: July 1 to June 30.
Annual GDP growth rate (FY 2008): 6.2%; (FY 2008 World Bank est.): below 6%.
Current GDP: $79 billion.
Per capita GDP (2008 est.): $554.
Inflation (December 2008): 6.03% (point to point basis) and 8.9% (monthly average basis).
Exchange rate: FY 2003: U.S. $1=Taka 57.90; FY 2006: U.S. $1=Taka 69.43; FY 2007 (January): U.S. $1=Taka 69.69; FY 2009 (January): U.S. $1=Taka 68.90.
Annual budget (FY 2009): $14.5 billion.
Natural resources: Natural gas, fertile soil, water.
Agriculture (19.1% of GDP): Products--rice, jute, tea, sugar, wheat.
Industry (manufacturing; 28.6% of GDP): Types--garments and knitwear, jute goods, frozen fish and seafood, textiles, fertilizer, sugar, tea, leather, ship-breaking for scrap, pharmaceuticals, ceramic tableware, newsprint.
Trade: Total imports (FY 2008)--$21.6 billion: capital goods, food grains, petroleum, textiles, chemicals, vegetable oils. Growth rate over previous fiscal year: 25.95%. Total exports (FY 2008)--$14.11 billion: garments and knitwear, frozen fish, jute and jute goods, leather and leather products, tea, urea fertilizer, ceramic tableware. Growth rate over previous fiscal year: 16.04%. Exports to U.S. (Jan.-Dec. 2008)--$3.74 billion. Imports from U.S. (Jan.-Dec. 2008)--$468.1 million.

Geography of Bangladesh

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. Official Name: People's Republic of Bangladesh 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.

Government of Bangladesh

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 circumscribed powers are substantially expanded during the tenure of a caretaker government. Under the 13th Amendment, which 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 Chief Adviser and other advisers to the caretaker government must be appointed within 15 days after the current Parliament expires.

The prime minister is appointed by the president. The prime minister must be a Member of Parliament (MP) who 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. All of its members are elected by universal suffrage at least every five years. Parliament amended the constitution in May 2004, making a provision for 45 seats reserved for women to be distributed among political parties in proportion to their numerical strength in Parliament. The AL did not take its share of the reserved seats, arguing that it did not support the indirect election or nomination of women to fill these seats. Several women's groups also demanded direct election to fill the reserved seats for women.

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, sub districts, 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.

POLITICAL CONDITIONS

Despite serious problems related to a dysfunctional political system, weak governance, and pervasive corruption, Bangladesh remains one of the few democracies in the Muslim world. Bangladeshis regard democracy as an important legacy of their bloody war for independence, and they vote in large numbers. However, democratic institutions and practices remain weak. Under the state of emergency, political activities were restricted. Bangladesh is generally a force for moderation in international forums, and it is also a long-time leader in international peacekeeping operations. Its activities in international organizations, with other governments, and its regional partners to promote human rights, democracy, and free markets are coordinated and high profile. In May 2005, Bangladesh became a member of the United Nations Human Rights Council.

Bangladesh lies at the strategic crossroads of South and Southeast Asia. Potential terrorist movements and activities in or through Bangladesh pose a potentially serious threat to India, Nepal, Bhutan, and Burma, as well as Bangladesh itself. The Bangladesh Government routinely denies Indian allegations that Indian insurgents in northeast India operate out of Bangladesh and that extremist Islamist forces are overwhelming Bangladesh's traditionally moderate character. It also denies there is any international terrorist presence in Bangladesh. The Bangladesh Government, however, banned a number of Islamic extremist groups in recent years. In February 2002, the government banned Shahdat al Hiqma, in February 2005 it banned Jagrata Muslim Janata, Bangladesh (JMJB) and Jama'atul Mujahideen Bangladesh (JMB), and in October 2005 it banned Harkatul Jehad Al Islami (HUJI). Following the August 17, 2005 serial bombings in the country, the government launched a crackdown on extremists. In 2006, seven senior JMB leaders were sentenced to death for their role in the 2005 murder of two judges. Six of the seven were executed in March 2007; another leader was tried and sentenced to death in absentia in the same case. In March 2008, the U.S. Government listed Harkatul Jihadi Islami (HUJI)-Bangladesh a foreign terrorist organization. Given its size and location, a major crisis in Bangladesh could have important consequences for regional stability, particularly if significant refugee movements ensue.


Principal Government Officials

President--M. Zillur Rahman

Prime Minister--Sheikh Hasina

Foreign Minister--Dipu Moni

Ambassador to the United States--M. Humayun Kabir

Ambassador to the United Nations--Ismat Jahan

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

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 (345 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 (AL), the Jatiya Party, and the Jamaat-e-Islami Party.

Suffrage: Universal at age 18.

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History of Bangladesh

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 1971.

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--known widely as "Mujib"--in 1949 formed the Awami League (AL), a party designed mainly to promote Bengali interests. Mujib became president of the Awami League 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 and 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. On April 17, 1971, a provisional government was formed in Meherpur district in western Bangladesh bordering India with Sheikh Mujibur Rahman, who was in prison in Pakistan, as President, Syed Nazrul Islam as Acting President, and Tajuddin Ahmed as Prime Minister.

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 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 Prime Minister Mujib's daughter, Sheikh Hasina Wajed-- lent the elections some credibility, despite widespread charges of 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 coalition government with 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 conduct new parliamentary elections; former Chief Justice Mohammed Habibur Rahman was named Chief Advisor (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 have 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 has 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, 2001-2006

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 Prime Minister for the third time (first in 1991, second after the February 15, 1996 elections).

Despite her August 2001 pledge and all election monitoring groups declaring the election free and fair, Sheikh Hasina condemned the election, rejected the results, and boycotted Parliament. In 2002, however, she led her party legislators back to Parliament, but the Awami League again walked out in June 2003 to protest derogatory remarks about Hasina by a State Minister and the allegedly partisan role of the Parliamentary Speaker. In June 2004, the AL returned to Parliament without having any of their demands met for an apology to Sheikh Hasina and guarantees of a neutral Speaker. They then attended Parliament irregularly before announcing a boycott of the entire June 2005 budget session.

On August 17, 2005, near-synchronized blasts of improvised explosive devices in 63 out of 64 administrative districts targeted mainly government buildings and killed two persons. An extremist Islamist outfit named Jamiatul Mujahideen, Bangladesh (JMB) claimed responsibility for the blasts aimed to press home their demand for replacement of the secular legal system with Islamic sharia courts. Subsequent attacks on the courts in several districts killed 28 people, including judges, lawyers, and police personnel guarding the courts. A government campaign against the Islamic extremists led to the arrest of hundreds of senior and mid-level JMB leaders. Six top JMB leaders were tried and sentenced to death for their role in the murder of two judges; another leader was tried and sentenced to death in absentia in the same case.

In February 2006, the AL returned to Parliament, raised demands for early elections, and requested significant changes in the electoral and caretaker government systems to stop alleged moves by the ruling coalition to rig the next election. The AL blames the ruling party for several high-profile attacks on opposition leaders, and asserts that the ruling party is bent on eliminating Sheikh Hasina and the Awami League as a viable force. The BNP and its allies accuse the AL of maligning Bangladesh at home and abroad out of jealousy over the government’s performance on development and economic issues. Dialogue between the Secretaries General of the main ruling and opposition parties failed to sort out the electoral reform issues.

Caretaker Government, October 2006-Present

The 13th Amendment to the constitution required the president to offer the position of the Chief Adviser to the immediate past Chief Justice of the Supreme Court, Justice K.M. Hasan, once the previous parliamentary session expired on October 28, 2006. The AL opposed Justice Hasan, alleging that he belonged to ruling BNP in his past life and that the BNP government in 2004 amended the constitution to extend retirement age for the Supreme Court judges to make sure that Justice Hasan became the Chief Adviser during the next elections to help BNP win the election. Justice Hasan declined the position, and after two days of violent protests, President Iajuddin Ahmed also assumed the role of Chief Adviser to the caretaker government.

On January 3, 2007, the Awami League announced that they would boycott the January 22 parliamentary elections. The Awami League planned a series of country-wide general strikes and transportation blockades.

On January 11, 2007, President Iajuddin Ahmed declared a state of emergency, resigned as Chief Adviser, and indefinitely postponed parliamentary elections. On January 12, 2007, former Bangladesh Bank governor Fakhruddin Ahmed was sworn in as the new Chief Adviser, and ten new advisers (ministers) were appointed. Under emergency provisions, the government suspended certain fundamental rights guaranteed by the constitution and detained a large number of politicians and others on suspicion of involvement in corruption and other crimes. The government announced elections will occur in late 2008 and is registering an estimated 80 million voters in preparation for the elections.

On July 16, 2007 the government arrested Awami League president and former Prime Minister Sheikh Hasina on charges of extortion during her tenure as Prime Minister. On September 3, 2007 the government arrested BNP chairperson and former Prime Minister Khaleda Zia on charges of corruption. Subsequently, the Anti-Corruption Commission has filed more corruption cases against Bangladesh's two most influential political leaders. Both Hasina and Zia have challenged the cases filed against them under the Emergency Power Rules, which deny the accused the right to bail. While the cases are under judicial review, the two leaders continue to be imprisoned.

People of Bangladesh

The area that 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.

Nationality: Noun and adjective--Bangladeshi(s).
Population (July 2007 CIA est.): 150 million.
Annual growth rate (July 2009 CIA est.): 1.29%.
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--61%. Adult literacy rate--47.5%. (UNDP Human Development Index 2007/2008)
Health: Infant mortality rate (below 1)--54/1,000. Life expectancy--63.1%. (Both figures from UNDP Human Development Index 2007/2008)
Work force (60.3 million): Agriculture, forestry, and fisheries--48.1% (Bangladesh Bureau of Statistics 2005/2006); manufacturing--11%; mining and quarrying--0.2%; others--36%.

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