Bangladesh: Uncharitable Charities

SANCHITA BHATTACHARYA

Identifying and neutralising the sources of terrorist funding have become global concerns. The United States' Ambassador to Bangladesh, Dan W. Mozena, on December 10, 2014, asserted, "The terrorists who seek to destroy our communities of peace, diversity and tolerance have developed many avenues for generating money to fuel their vast machines of death...One source of financing terrorism and violent extremism is charity, the vast network of charitable organisations thrives across South Asia and we must fight back against it."

Echoing similar concerns, Bangladesh Law Minister Anisul Huq stated, as reported on December 10, 2014, that millions of dollars were collected every year in the name of benevolence and charitable activities but a portion of it, either by design or exploitation of organisational structure, is diverted to fund acts of terrorism. The fight against terrorism should be a global and collaborative effort so that charitable and Non-Government Organisation (NGO) activities do no turn into support for terrorism, he added.

Bangladesh has a history of involvement in money-laundering and terrorist financing cases. Interestingly, the Bangladesh Cabinet, on December 1, 2014, approved the draft of the much awaited Foreign Contributions (Voluntary Activities) Regulation Act, 2014, intended to regulate the flow of foreign aid being channelled to non-profit groups. The approval was given in the weekly meeting of the Cabinet held at the Bangladesh Secretariat, with Prime Minister Sheikh Hasina Wajed in the Chair. The proposed draft law is intended to ensure transparency, accountability, proper inspection, monitoring, evaluation and appropriate use of foreign funds by NGOs.

Cabinet Secretary M. Musharraf Hossain Bhuiyan subsequently stated, "No NGO will be able to run its activities without taking registration from the NGO Affairs Bureau. No registration is required in case of individuals, but approval has to be taken from the Bureau... The proposed law has also a provision for punishment, cancellation of registration and imposition of fines for violating the law".

The Act is supposed to be a comprehensive and wide ranging legal instrument to provide support and regulation of NGO activities. It has been prepared by integrating two previous legal instruments: The Foreign Donations Voluntary Activities Regulation Ordinance, 1978; and the Foreign Contributions Regulation Ordinance, 1982.

December 6, 2014, reports indicated that Bangladesh Bank, the country's central bank, had also asked commercial banks to take effective measures under the anti-money laundering and anti-terror financing laws to check illegal fund transfer and associated pecuniary offences. Bangladesh Bank Governor Atiur Rahman noted that money-laundering offences hindered the socio-economic development of the country: "Such risk will increase gradually if money laundering is not prevented effectively... Recently, different banks have been fined due to non-compliance with the KYC provisions."

The previous Money Laundering Prevention Act, 2012 and Anti Terrorism Amendment Act, 2013 also sought to regularise financial activities. The 2013 Act, provides capital punishment as highest penalty for terrorism and subversive activities. Further, it allowed the courts to accept videos, still photographs, and audio clips used in facebook, twitter, skype and other social media, as evidence. In December 2014, eight banks in Bangladesh were fined for not keeping client affidavits and not informing authorities of suspicious transactions in time. The banks include: Islami Bank, Premier Bank Limited, BRAC Bank, Mercantile Bank, Dutch-Bangla Bank, Southeast Bank, Uttara Bank and Bangladesh Investment Finance Corporation. They were slapped with fines ranging from Tk 200,000 to Tk 2 million under the law to prevent money laundering, Mohammad Mahfuzur Rahman, Deputy Head of the Bangladesh Financial Intelligence Unit (FIU) disclosed.

In order to extract information on money laundering by various elements, the Anti Corruption Commission (ACC), in the month of November 2014, sent Mutual Legal Assistance Requests (MLAR) to 14 countries, for information regarding alleged money laundering by the country's businessmen, politicians, industrialist, and government officials. However, ACC Secretary M. Maksudul Hasan Khan did not disclose the names of the 14 countries and the suspected money launderers.

Bangladesh has long been plagued by illicit financial transfers from both national and international sources. It is suspected that militants regularly tap into these illegal money flows to fund their operations. Money laundering is also a prime way of generating funds. Remittances from expatriate Bangladeshis working in the Middle East, the United Kingdom and elsewhere, are a further area of concern. There is a broad consensus that such techniques are used by militant organisations. One of the most significant links to funding from the Diaspora was uncovered in March 2009, when a madrasa (Islamic seminary) in Bhola District in southern Bangladesh was raided by an anti-terrorist unit, which seized 10 firearms, 2,500 rounds of ammunition and radical Islamic literature. Subsequent investigations revealed that the madrasa was funded by the British-registered charity Green Crescent.

Further, the Saudi Arabia-based al-Haramain Islamic Foundation, banned internationally by United Nations Security Council (UNSC) Resolution 1267, along with other charities from the Middle East, is infamous for financing terrorism in Bangladesh. NGOs and charities, such as the Kuwait-based Revival of Islamic Heritage Society (RIHS) and the Saudi Arabian Hayatul Igachha (HI), have also been linked to Islamist extremism in the country.

The Islami Bank Bangladesh Limited (IBBL) reportedly handled accounts of various Wahhabi organisations, that propagate radical Islam in the country. In 2011, the Bangladeshi Home Ministry intelligence revealed that eight per cent of the Bank's profits were diverted to support jihad in Bangladesh. Another sharia bank, Social Islami Bank, worked with HSBC. In 2011, the US Senate implicated HSBC for disregarding evidence of terror financing at the Social Islami Bank.

More recently in February 2014, UNSC provided definite information that al Qaeda network was active in Bangladesh. The UN has indicated that two NGOs, Global Relief Foundation and al-Haramain Islamic Foundation, working in Bangladesh, were involved with al Qaeda.

In a positive initiative, the Shiekh Hasina-led Government is not only trying to monitor and regulate NGO-related funding channels and activities, but, at the same time, is also looking into the bigger picture of financial fraud and terror connections. The existence of financial networks related to the infrastructure of terrorism in Bangladesh constitute a serious threat not only to the country itself, but to the stability of the wider region as well.

First published in South Asia Intelligence Review, Weekly Assessments & Briefings, Volume 13, No. 24, December 15, 2014

Sanchita Bhattacharya is Research Associate, Institute for Conflict Management, India

Will Bangladesh Ever Have a Future?

PANKAJ MISHRA

To an Indian who grew up in the 1970s and ‘80s, the sights of Dhaka, Bangladesh, seem to belong to a past that Indian metropolises have mostly outgrown: exuberantly battered buses, unpainted buildings, pavement book vendors with faded posters of Rabindranath Tagore and Karl Marx as well as the Rolling Stones, and pitch darkness on the unlit streets and squares where rural migrants congregate in the evenings. The countryside still feels closer here than in Kolkata or Mumbai.

In recent years, Bangladeshis have suffered the brutality of security forces and massive environmental destruction. For months now, the news from the world’s seventh-most-populous country has been dominated by the fractiousness of the country’s main leaders, the trial of men suspected of war crimes during Bangladesh’s war of liberation in 1971, and the slavery-like conditions of the country’s garment industry.

I arrived in Dhaka during one of the many recent strikes called by the opposition party, the Bangladesh Nationalist Party, against the ruling Awami League. The shutdowns, imposed through force, seemed economically ruinous, damaging small businesses the most; they resolved nothing. At first glance, Bangladesh seemed, like many countries in its neighborhood, to be struggling to find a way forward.

Irreconcilable Differences

Shackled by irreconcilable differences between political personalities, the country offers yet another instance of a fledgling democracy undermined by an undemocratic winner-takes-all attitude among its leaders. Bangladesh does have its innovators, such as Muhammed Yunus, the pioneer of microcredit. The banking system seems more responsive to the poor majority than in it does India. Bangladesh also does better than its much richer neighbor in almost all indicators of the United Nations’ Human Development Index.

But the benefits of trade liberalization -- and, in general, Bangladesh’s integration into the global economy -- have been more limited than previously expected. Certainly, the country’s economic modernization, which seems necessary to pull tens of millions out of destitution, seems to be proceeding much too slowly.

India is building a security fence on its border with Bangladesh, ostensibly to keep out Bangladeshi immigrants whose presence provides fodder to Indian demagogues. Meanwhile, a weakened state has ceded, often opportunistically, its responsibility to mitigate poverty and improve social infrastructure to such non-state actors as aid organizations, corporations, security companies, consultants, and various domestic and international non-governmental organizations. Bangladesh is one of the most NGO-ized countries in the world.

What happens next? Can Bangladesh join the modern world with its weakened governance, dysfunctional political system and uneven economic growth? An absorbing new book, “Boundaries Undermined: The Ruins of Progress on the Bangladesh-India Border,” seeks some answers in Bangladesh’s earliest attempt at modernization.

The author, a Bangladesh-born social anthropologist named Delwar Hussain, describes the strange aftermath of the Khonighat Limestone Mining Project. Situated near the Bangladeshi district of Sylhet and the Indian state of Meghalaya, Khonighat was one of the spectacular projects of national modernization that every postcolonial country once boasted of. India, for instance, had the Soviet-built Bhilai township -- designed, as one early resident, the poet and essayist Arvind Krishna Mehrotra, wrote, “by a pencil stub and a six-inch plastic ruler.”

The grids were no accident. They spoke of the rationalization and bureaucratization -- two crucial aspects of modernity -- that were supposed to weaken the hold of religion and custom. The worship of older authorities was to be discarded in a projected future full of plentiful modern goods and pleasures. In the postcolonial imagination of progress, projects such as big dams, factories and roads were expected to bring the backward masses out of the rural hinterlands and propel them into first-world prosperity.

Main Patron

Many of the new citizens of Pakistan, and then Bangladesh after 1971, eagerly participated in these public works, largely because employees were offered, as Hussain writes, “progress, status and prestige” through a range of welfare provisions: skills training, set wages, fixed working hours, health and safety regulations, pensions. The state, in turn, enjoyed its greatest legitimacy as the main patron of economic development.

But state-led projects such as Khonighat mostly helped people who were within its ambit; the majority of the country’s population remained trapped in poverty. Khonighat was closed down in 1993 after it became cheaper to import limestone from an economically liberalized India, and the World Bank and International Monetary Fund put greater pressure on Bangladesh to shut down its state-owned enterprises.

With its rusting machinery, unused cranes and half-torn railway tracks, Khonighat is now a ruin -- of the kind that, in Walter Benjamin’s vision, piles up as the storm of progress blows through the world. Meanwhile, the adjacent village of Borapani, which has become the center of an unorganized and semi-illicit coal mining industry, showcases the new forms of progress in many globalized economies.

Feeding the demands of Bangladesh’s coal-fired factories, the cashiered laborers of Khonighat have transformed themselves into traders. This impromptu and unusual elite is made more diverse by people previously relegated to the margins by Khonighat’s top-down modernization project, such as women and transgender hijras, who have achieved prominence by fulfilling local needs, economic as well as sexual: The cover photo on “Boundaries Undermined,” of a hand with brightly painted nails and a steel bracelet engraved with the word “Nike” grasping a coal sack, hints at the new ideas of work and pleasure that have emerged in the era of liberalization.

Subsidiary Professions

Religious practices suppressed by the secular ethos of Khonighat have also emerged. The coal business has generated some semi-illegal subsidiary professions, such as the trade in SIM cards in an area where both Indian and Bangladeshi governments have banned the use of mobile phones. Many of the older beneficiaries of the welfare and developmental state are now in retreat; they wallow in nostalgia for the good times of state-backed modernization and lament the new culture of greed and selfishness, while entrepreneurs who walk a fine line between criminality and legality flourish.

What does the creation of a new unsupervised social order with its multiple actors portend for Bangladesh? Here, Hussain’s answers are disconcertingly tentative. NGOs have not managed to reduce poverty; they may even have helped the middle class more than the poor and the marginalized. Short-term microfinancing by local and international NGOs has replaced long-term issues of infrastructure. According to Hussain, “there are no public health facilities, sanitation or even electricity” in Borapani. Residents who once had running water and even baths in the old quarters of Khonighat have to make do with rainwater in its abandoned limestone quarries.

There are other, less tangible losses in this brave new world: Garment workers in Dhaka pleading for better work conditions after an April factory collapse killed more than 1,000 people are asking for things that the employees of Khonighat effortlessly possessed.

Hussain’s mood is not all bleak. He points to “creative potentialities and possibilities” in the assertion of formerly excluded communities. Noting their record of religious tolerance, he hails the “disorganized cosmopolitanism” of Borapani. But he seems aware, too, of simmering frustrations among the “floating mass” of workers in unregulated zones. Much of today’s social and religious violence in India, for instance, is caused by the disempowering and degradation of men employed, if at all, in the vast “informal sector.”

Above all, millions of South Asians suffer from a general loss of national direction in an age when every man seems to be out for himself. In Bangladesh, as in India and Pakistan, the collapse of old nation-building projects of modernization has deprived most citizens of the stories and images through which they imagined themselves to be part of a larger whole.

For them, the disenchantment of the world feared by Max Weber has happened even while they await, seemingly forever, the next step into consoling prosperity and leisure. Meanwhile, ethnic and religious sectarians stand ready to channel their rage over being cheated. In that sense, Bangladesh, with its already antique modernity, illuminates South Asia’s troubled present as vividly as it does its past.

First published in Bloomberg.com, December 2, 2013

Pankaj Mishra is the author of “From the Ruins of Empire: The Revolt Against the West and the Remaking of Asia” and a Bloomberg View columnist. For comments: pmashobra@gmail.com

Bangladesh: From 'basket case' to model

Lessons from the achievements--yes, really, the achievements--of Bangladesh

Photo Caption: In this Sept. 30, 2012 photo, Sathi Akhtar, a 29-year-old Bangladeshi woman known as Tattahakallayani or Info Lady shows a 15-minute video played in a laptop at one of their usual weekly meetings at Saghata, a remote impoverished farming village in Gaibandha district, 120 miles (192 kilometers) north of capital Dhaka, Bangladesh. Dozens of Info Ladies bike into remote Bangladeshi villages with laptops and Internet connections, helping tens of thousands of people - especially women - get everything from government services to chats with distant loved ones.

In 1976, five years after independence, a book appeared called "Bangladesh: The Test Case of Development."

It was a test, the authors claimed, because the country was such a disaster that if development could be made to work there, it could surely work anywhere. At the time, many people feared that Bangladesh would not survive as an independent state.

One famine, three military coups and four catastrophic floods later, the country that former U.S. Secretary of State Henry Kissinger once dismissed as "a basket case" is still a test. But no longer in the sense of being the bare minimum that others should seek to surpass. Now, Bangladesh has become a standard for others to live up to.

In the past 20 years, Bangladesh has made extraordinary improvements in almost every indicator of human welfare. The average Bangladeshi can now expect to live four years longer than the average Indian, though Indians are twice as rich. Girls' education has soared, and the country has hugely reduced the numbers of early deaths of infants, children and mothers.

Some of these changes are among the fastest social improvements ever seen. Remarkably, the country has achieved all this even though economic growth, until recently, has been sluggish and income has risen only modestly.

Bangladesh might seem like a special case. Because of its poverty, it has long been a recipient of vast amounts of aid. With around 150 million people crammed into a silted delta frequently swept by cyclones and devastating floods, it is the most densely populated country on Earth outside city-states. Hardly any part is isolated by distance, tradition or ethnicity, making it easier for antipoverty programs to reach everyone. Unusually, it has a culture that is distinct from its religion: although most Bangladeshis are Muslims, their culture and language are shared with the non-Muslim Indian state of West Bengal. Religious opposition to social change has been mild. Not many nationalities have so unusual a collection of traits.

The female factor

That said, the most important of the country's achievements can serve as a model for others. Bangladesh shows what happens if you take women seriously as agents of development. When the country became independent, population-control policies were all the rage (this was the period of China's one-child policy and India's forced sterilizations). Happily lacking the ability to impose such savage restrictions, the government embarked instead upon a program of voluntary family planning. It was stunningly successful. It not only halved the rate of fertility within a generation, but also increased women's influence within their own households. For the first time, wives controlled the size of families.

Later, the textile industry took off -- and four-fifths of its workers are female. Bangladesh was also the home of microcredit, tiny loans for the poorest. By design, these go to women. Thus, over the past two decades women have earned greater influence in the home and more financial autonomy.

And, as experience from around the world shows, women spend their money differently from men: typically, on their children's food, health and education. Child welfare has been underpinned by a quiet revolution in the role of women.

That is not all there was to it. Thanks to remittances from abroad and to the Green Revolution, Bangladesh has done better than most at reducing persistent rural poverty. It has maintained a broad consensus in favor of basic social spending despite military coups and a toxic politics dominated by the bitter infighting of the "battling begums" (the widow and daughter of former presidents, who lead the two main parties).

Bangladesh also has benefited by letting non-governmental organizations (NGOs) get on with what the state itself has been too weak or corrupt to do: experiment with different programs and scale up those that work. Much of its success is attributable to local NGOs like Grameen and BRAC.

Bangladesh has shown that countries can transform the lives of the poorest without having to wait for economic growth. But it does not show that growth is irrelevant. The country surely would have done better still if its economy had expanded faster.

As people's education and expectations rise further, it will be all the more important to provide new jobs and opportunities for advancement.

This article was first published in THE ECONOMIST, November 5, 2012