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Statement of Mr. Reaz Rahman, Hon'ble State Minister for Foreign Affairs in the Seminar on "The Review of the Foreign Policy of the Government and Vision for the Future" held on 29 October, 2002.

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Hon'ble Foreign Minister
Excellencies,
Distinguished Guests
Ladies and Gentlemen.

I am privileged to address this important gathering and to share some views on Foreign Policy of the present government of Bangladesh.

I believe that three factors shape the substance and thrust of our foreign policy - responsibility, competition and contribution. They form a useful gauge to project directions.

It is a truism that foreign and domestic policies are inextricably interlinked. Foreign Policy cannot be divorced from domestic policies, priorities, constraints and compulsions.

The present government's assumption of power coincided with the first year of the new millennium. Yet it dawned in the midst of cataclysmic events that shook the world. The immediate impact was destabilization and deepening of the world economic recession which after 7 consecutive years of high growth, left the wold in disarray. The Terrorist attack on the United States on 11 September literally changed the world. It intensified the economic crises, shattered collective confidence and bred a chain reaction of suspicion.

At home, the government was assailed from the outset by a determined, campaign of vilification by the opposition that concentrated on alleged minority and human rights attacks, breakdown of law and order, jumbo size of the Cabinet etc. A drumbeat of repetition of these charges sought to give them validity. At the same time efforts were made to launch a smear campaign from abroad that would taint Bangladesh as a potential terrorist country, a fertile ground for "creeping fundamentalism" with Madrassahs churning out radicals and a possible haven for militants of all nations and especially Al Qaeda and Taliban fugitives.

Responsibility, underscores certain essential parameters. the government concentrated on these rather than the aberrations highlighted above. These included shoring up democracy and good governance; managing the fragile and unstable democracy it inherited through a viable reform package and the creation of an enabling environment through a short-term trouble shooting agenda. Four scenarios evolved:

First: In pursuit of its election pledges the government moved ahead in some important directions. A National Human Rights Commission is being set up. The Ombudsman Act of 1980 is being made effective and an Ombudsman is expected to be appointed soon. More powers have been delegated to the Bureau of Anti-Corruption enroute to the establishment of an Anti-Corruption Commission. Measures are being taken to ensure separation of the Judiciary from the Executive. These measures cannot always be hurried. They require considered implementation. Separation of Auditing and Accounting functions are also being implemented. Within the framework of "Public Procurement Reforms" project, the government has decided to create a Central Procurement Policy Unit for transparency of contracts. Government has repealed the Public Safety Act (2000) in its move to repeal black laws curbing fundamental rights. The bottom line is that the government is accountable to implement its election pledges and is consciously addressing these issues.

Second: The government is also committed to strengthen the democratic process and all the tenets that stand for good governance including the rule of law, peoples participation, accountability and transparency and freedom of the press. A responsible government must also emphasize respect for human rights, fair, efficient and transparent public management of economic and social resources, national and individual security, quick dispensation of justice, access to resources and institutional facilities and prompt delivery of utility services. A cardinal charge is to actively encourage the opposition to join the parliament. Obviously, listing of responsibilities does not guarantee automatic implementation. Yet, they constitute a commitment, a recognition of the need for forward momentum.

Third: From its inception, the government moved in a concerted manner to implement a focussed 100-day priority program. Committees at the Executive (Secretary level) were charged with specific action in five areas - Administrative Reform; Law and Order; Poverty Reduction; Human Resources Development and Monetary Management. Important actions were initiated in the financial sector (reconstruction of banks and financial institutions) giving greater autonomy to the Central Bank, initiating a new Money Laundering Preservation Act, rationalising credit and restructuring tax administration. The government has decided to privatize State Owned Enterprises (SOE's) phase-wise irrespective of profitability - closure of the Adamjee Jute Mills was a pioneering step.

Fourth: Among key imperatives was the need to create an enabling climate to deal with constraints that cut across all economic sectors and deter investment. These include daily traffic jams, constant load-shedding, disruption of water and gas supply, widespread air, noise and water pollution, chaos in the ports, inefficient and corrupt customs, rent seeking culture, bureaucratic red tape and pervasive corruption. By targeting these constraints, important progress has been made towards remedial solutions.

Mr. Chairman,

A major thrust of the government is to pursue an aggressive policy to promote economic objectives i.e. economic diplomacy. In sum, economic diplomacy is predicated on realising new necessities and the radical shift in emphasis brought about by globalisation and the interaction between domestic and foreign policies that has triggered intense competition for market, resources, technology and employment abroad.

The determining factor is COMPETITION. Each country has to compete to promote economic interests in four main directions:

(i) To augment aid in a scenario of consistent decline of ODA over a decade.

(ii) To promote access to markets by opening new markets or strengthening old ones.

(iii) Encouraging and attracting foreign direct assistance.

(iv) Funding and facilitating employment opportunities.

By its very definition economic diplomacy involves the ability to negotiate in all forums, individual, bilateral, regional and multilateral and to hone up specialized capacities in this regard - strategies, tactics, knowledge of procedures, data bases and updating information etc. Above all, there is a need for a defined policy framework - a blue print to advance economic diplomacy. We are now working on this.

It is obvious that economic diplomacy cannot be divorced or viewed in isolation from the country's economic agenda. Government has taken steps to implement plans in four areas:

(a) REDUCING POVERTY

The government's pre-eminent objective is poverty reduction charted along 4 action paths - pro-poor economic growth, human development, broad-based safety net program and participatory governance. These are the elements to be incorporated into its Poverty Reduction Strategy Paper (PRSP) which will be country driven with regard to the extent of the reform agenda.

(b) RAISING RURAL PRODUCTIVITY
This continues to remain a priority objective. Agriculture is still the predominant sector in contributing to productivity and job creation. The focus is on innovating new technology, encouraging diversification, bolstering rural non-farm technology, ensuring rural credit, developing infrastructure and promoting IT and bio-technology.

(c) BOOSTING TRADE AND JUMP-STARTING INDUSTRY

There is a growing consensus that development is not possible without accelerated manufacturing, service sector, export-led growth and that trade not aid is our best alternative. Currently, industrial productivity and export is concentrated on Knitwear and Ready Made Garment (RMG). Much more needs to be done to diversify the export industry and alternative products. Some positive trends exist in the textile sector including prospects for both backward and forward linkage.

Industrial growth as a whole is lopsided. It was nurtured under a protected market environment. Today, we have a tripartite system of loss-making State Owned enterprises, NGO enterprises that are considered controversial and private profit making enterprises. It is increasingly being recognised that the core of any viable development strategy is the private sector.

(d) ATTRACTING INVESTMENT

Key to investment, foreign or domestic, are two factors already touched upon (I) creating an enabling climate and (ii) competition. To boost the economy and push high growth, investment is vital. This has increasingly to be met by domestic savings and by mobilising declining ODA or expanding FDI. Though Bangladesh provides an extensive package of incentives, ground realities have shown that investors will shy away because incentives are made meaningless by governance problems.

On an immediate basis important steps have been taken to redress problems inherited from the previous government. These include indifference to economic/structural reform, sluggish revenue collection, absence of transparency in fiscal policies, over ambitious public spending and expenditure on unproductive sectors and projects. The widening budget deficit has been reduced from 6% to 4.3%, domestic debt sharply reduced and the alarmingly low level of foreign exchange reserves doubled to $ 2 billion. The government has started the painful process of reform.

Overall performance has been good. A real breakthrough has been made in agricultural production, achieving food grain self-sufficiency and price stability, diversification of products and growth in agricultural exports. The garments miracle which spearheaded export-led growth is viable despite known challenges. Reasonable growth rates; containment of inflation and significant advances and innovations in the social sectors have constituted a social revolution of sorts. Micro-credit, gender mainstreaming, cut (by half) of population growth rate, curbs on child mortality and child labour; improved sanitation, immunization; massive allocations for primary and secondary education for boys and girls, environmental supportive measures including ban on polythine bags, reduced emission of ozone depleting substances and vehicular pollution underscore many small but cumulative success stories.

Mr. Chairman,

My final point relates to CONTRIBUTION:

A cardinal priority of this government is for Bangladesh to play a leading role through concrete initiatives on the basis of moderation/pragmatism in all international fora to project and promote the cause of developing countries and particularly the poorest among them. This calls for strategies to stop falling investment, restructure and reduce debt, promote trade and encourage technology transfer.

A crucial charge consistent with our Constitution is to strengthen the role of the UN as the central organ for the cooperative management of the worlds problems. In the face of growing disillusionment about the relevance and credibility of the UN - Bangladesh remains committed to uphold its viability. As member of the OIC, Non-Aligned Movement and the Commonwealth we are conscious that the decision-making process of all these bodies are geared to the UN in the pursuit of its great goals of peace, justice and development. Bangladesh will continue to actively contribute to the peaceful settlement of disputes and bolster collective security. Our commitment to Peace Keeping remains active and strong as indeed, to all efforts for effective management of conflicts including preventive diplomacy, peace-making, peace-keeping and peace-building.

The government recognises also that the quest for world order must begin by putting our own house in order in the region. We are committed to maintain the positive momentum and credibility of SAARC, to promote its socio-economic mandate, to create a broad-based climate of confidence building and reduce tension in the region.

The present government believes that the most compelling security challenge in South Asia, is promoting sustainable growth, reform and development. Nuclearisation in South Asia has if anything, enhanced security concerns in the region. We adhere strongly to the proposition that security goes beyond the weapons a nation possesses. It extends to raising living standards and shoring up democracy.

We welcome the recent announcement of pull-back of troops from the Indo-Pak border. Yet the 8 months long gridlock has underscored the dire necessity to de-escalate tension, promote dialogue, we hope the process of parallel bilateral talks with the United State to establish some form of nuclear restraint regime will be resumed.

Bangladesh has never sought to mediate in the dispute between India and Pakistan. We have however, expressed to each of them, that we have a legitimate concern that their confrontation can have disastrous spill-over effects on all their neighbours in the region. We remain however, always ready to act as facilitators to reduce tension and harmonise relations. It has been suggested that there should be an expanded role by SAARC to broaden its dialogue on the fringes of Summit/Ministerial Meetings to include regional security. We would support such an initiative if all member states agree.

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