While the United States dithers, a growing Islamic fundamentalist movement linked to al-Qaida and Pakistani intelligence agencies is steadily converting the strategically located nation of Bangladesh into a new regional hub for terrorist operations that reach into India and Southeast Asia.

With 147 million people, largely Muslim Bangladesh has substantial Hindu and Christian minorities and is nominally a secular democracy. But the ruling Bangladesh Nationalist Party struck a Faustian bargain with the fundamentalist party Jamaat-e-Islami five years ago to win power.

In return for the votes in parliament needed to form a coalition government, Prime Minister Khaleda Zia has looked the other way as the Jamaat has systematically filled sensitive civil service, police, intelligence and military posts with its sympathizers, who have in turn looked the other way as Jamaat-sponsored guerrilla squads patterned after the Taliban have operated with increasing impunity in many rural and urban areas.

To the dismay of her business supporters, the prime minister gave the coveted post of industries minister to Matiur Rahman Nizami, a high-ranking Jamaat official who has helped promote the growth of a Jamaat economic empire that embraces banking, insurance, trucking, pharmaceutical manufacturing, department stores, newspapers and TV stations. A study last year by a leading Bangladeshi economist showed that the "fundamentalist sector of the economy" earns annual profits of some $1.2 billion.

Now the BNP-Jamaat alliance is rigging the next national elections, scheduled for January, to prevent the return of the opposition Awami League to power. Voter lists are being manipulated, and the supposedly neutral caretaker government and the commission that will run the election are being turned into puppets.

The BNP argues that coalition rule helps moderates in the Jamaat to combat Islamic extremist factions. But the reality is that Jamaat inroads in the government security machinery at all levels, starting with Home Secretary Muhammad Omar Farooq, widely regarded as close to the Jamaat, have opened the way for suicide bombings, political assassinations, harassment of the Hindu minority and an unchecked influx of funds from Islamic charities in Saudi Arabia and the Persian Gulf to Jamaat-oriented madrassas (religious schools) that in some cases are fronts for terrorist activity.

With some 15,000 hard-core fighters operating out of 19 known base camps, guerrilla groups sponsored by the Jamaat and its allies were able to paralyze the country last Aug. 17 by staging 459 closely synchronized explosions in all but one of the country's administrative districts. When the key leaders of these groups were captured, they were kept by the police in a comfortable apartment, where they were free to receive visitors. A cartoon in the Daily Star of Dhaka on July 24 showed them lounging on a rug, conducting classes in bomb making. Their fate and present place of confinement is uncertain, and all of the major guerrilla groups are back to business as usual.

Foes of independence

The bitterness of Bangladeshi politics is often attributed to a personal vendetta between two strong women, Prime Minister Zia and the Awami League leader, Sheikh Hasina Wajed. But the roots of the current struggle go back to 1971, when Bengali East Pakistan, led by the Awami League, broke away from Punjabi-dominated West Pakistan to form the nation of Bangladesh.

The Jamaat, which originated in the western wing, opposed the independence movement and fought side by side with Pakistani forces against both fellow Bengalis and the Indian troops who intervened in the decisive final phase of the conflict.

For Pakistan's intelligence agencies, especially Inter-Services Intelligence, the legacy of the independence war has been a built-in network of agents within the Jamaat and its affiliates who can be utilized to harass India along its 2,500-mile border with Bangladesh. In addition to supporting tribal separatist groups in northeast India, the ISI uses Bangladesh as a base for helping Islamic extremists inside India. After the July 11 train bombings in Bombay, a top Indian police official, K.P. Raghuvanshi, said that his key suspects "have connections with groups in Nepal and Bangladesh, which are directly or indirectly connected to Pakistan." (next page »)