Wednesday, July 4, 2012

Foreign policy failures
"Defense and diplomacy"page
Daily Sun
4th July, 2012
M. Serajul Islam 

Two recent developments provide a negative assessment of this government's performance in foreign relations These are, first, the cancellation of the Padma Bridge loan by the World Bank;  and second, the statement of the fifteen women Senators urging the government to be fair to the Grameen Bank.

The curtain has finally fallen over the drama involving the Government and the World Bank. The Bank announced this week that it was canceling the contract it had signed to provide US$ 1.2 billion loan of the US$ 2.7 billion that would be required to build the Padma Bridge with the ADB and JICA as co-financiers for the remaining portion of the loan. The World Bank stopped processing the loan last year after allegations of corruption came up against officials of the lead Ministry for executing the loan, the Ministry of Communications. The Bangladesh Government rejected the allegations outright although names were not mentioned or at least not in public, 

Thereafter, the handling of the protracted affair by the Bangladesh Government was poor. Initially, by media reports, it was evident that the World Bank wanted the Minister for Communications to go that the Government resented and resisted. In the end, although the Minister was removed, the Government refused to admit that this was done under WB pressure.  Nevertheless, the WB/ADB/JICA’s stand not to fund the project till its concerns on corruption were resolved placed the Government in a difficult situation because of the project’s political importance. In the end, the government failed to resolve the matter with the WB because the Prime Minister took a personal stand in the matter. Perhaps there were other individuals involved that the Government needed to protect.  

Further complications that revealed confusion at high levels emerged as a consequence of the intransparent way the government handled the issue. The Finance Minister and the new Communications Minister publicly contradicted each other many times. The Minister of Communications did not leave anyone in doubt that his main intention was to please the Prime Minister. He made statements in media stating that Malaysians were eager to step into the WB's shoes to rescue Bangladesh without checking on facts. When he was informed that Bangladesh would have to rescind the contract with the WB to sign the contract with Malaysia, he retracted.  

It is time for the Government to come out clean and inform the costs for the Malaysian funding now that the WB has cancelled the contract. From media reports, the costs seem to have gone up by US$ 300 million already from US 2.7 under the contract with WB, ADB and JICA to over US $ 3 billion under the contract offered by Malaysia.  Then of course, the Malaysians would not provide the loan at the WB's rate that would enhance costs even further. The Malaysians are coming to the project as a business venture. Their business interests are certain to add enormously to the costs that the people have a right to know. 

The AL led Government would need to consider whether it has the ethical right to sign the contract with Malaysia if the costs go up enormously as it will. The controversy that has been created because of mishandling the negotiations with the WB is a further reason that strengthens the ethical argument.  Under the best case scenario, the AL led government would be able to start the contract only. The major part of the work would be completed under the next government. Therefore, the government should not start the project simply for political gains. In any case, by some very poor handling, the government has not just put at jeopardy serious national interests but has also allowed the WB to abort the contract with serious charges of corruption against it not just unresolved but strengthened. 

The statement of the 15 women Senators is also a strong reflection on poor handling of a domestic issue with critical foreign affairs repercussions by the government. The Senators have sent a very strong message to the Prime Minister to leave Grameen Bank alone. This government opened itself to critical international attention and censure after deciding to remove Dr. Yunus from the GB on the plea that he had passed the mandatory age of remaining as the Managing Director of the Bank. In removing him, the Government also tried to humiliate him by accusing him of corruption and fleecing the poor. In the end, the government removed him from the GB but at the cost of annoying powerful international leaders such as the US President and Secretary of State who sent at first her emissaries and then came to Dhaka to convey her personal annoyance. 

The Government also failed to prove the charges against Dr. Yunus that destroyed its claim it that it had acted against the Noble Laureate on issues of the law and principle. This notwithstanding, the Government refused to let Dr. Yunus alone leading New York Times and the Economist to bring charge of vindictiveness against it. Recently it formed a committee to investigate 54 GB subsidiaries to find out whether there has been any corruption or wrong doing in these institutions that could be linked to Dr. Yunus. Recently, 9 independent Directors of GB, women that the GB initiative has brought out of poverty to place them in such responsible positions, voiced their disapproval at the latest Government action. They made a passionate plea to the government to leave the GB alone. The letter of the Senators voiced the sentiments and emotions of these 9 GB Directors.

The Senators belong to both side of the political divide of the US that makes their letter very important. By disregarding the requests of the US President and its Secretary of State the Government has placed Bangladesh at odds with the Obama Administration that is proving serious impediments to achieving its foreign policy goals. If it displays the same impulsive attitude towards the Senators, the Government would be destroying its chances of benefitting at all from its bilateral relations with the USA that has the power to make or break a country such as Bangladesh. The letter is another chance to the Government to get its diplomacy in order and its diplomatic rudder attuned to the needs and the interests of the county. 

Unfortunately, these two developments show how personal ego and interests have stood in the way of Bangladesh achieving its foreign policy interests with major bilateral partners and international financial agencies. Those responsible for advising the Prime Minister on the country's foreign policy have failed her badly. They failed to tell her about the futility of fighting the USA and the World Bank on an individual and an institution that the world respects or on charges of corruption against individuals at key positions of the government that it cannot disapprove. If this government could have placed national interests over individual ones, it could have been the best placed of all Bangladesh governments to reach out to the most influential world leaders to further its national interests.  

Before deciding to make world leaders unhappy over issues that common sense should have dictated otherwise, Sheikh Hasina had shown the promise to make a position for herself as an international leader, glimpse of which she had shown during her participation at the Climate Summit at Copenhagen in 2010. She has wasted that promise on the issues of Dr. Yunus and the World Bank. The decision of the WB and the letter of the Senators highlighted how she and Bangladesh have been let down because of some abjectly poor and unwise diplomacy. 

The writer is a former Ambassador to Japan

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