Unresolved Legacy: Bangladesh’s Claims Against Pakistan Since 1971

Kazi Abul Monsur#

Even after 54 years of independence, Pakistan has yet to repay the financial dues owed to Bangladesh. In 1974, the Government of Bangladesh officially demanded nearly 4 billion USD from Pakistan. Over time, the value of this amount has increased to approximately 9.5 trillion Bangladeshi Taka!

According to the Universal Declaration of Human Rights by the United Nations in 1981, Bangladesh witnessed one of the largest genocides in the shortest time. Yet, Pakistan has still not offered an official apology.

Experts say that based on international financial standards, if calculated with an annual interest of 6%, the 1974 claim would amount to approximately 78.1 billion USD by 2025. Using the current exchange rate of 122 BDT per USD, this totals nearly 9,52,837 crore BDT, which is more than 9.5 trillion Taka in Bangladeshi currency.

Bangladesh initially raised this issue at the United Nations and other international forums back in 1974. The then government under Prime Minister Sheikh Mujibur Rahman clearly claimed this amount as Bangladesh’s rightful share of the joint assets of former united Pakistan.

However, the financial dues are not the only claims Bangladesh has against Pakistan. There are other unresolved issues, such as:

• Prosecution of war criminals from the 1971 Liberation War,
• The return of properties left in Pakistan,
• And accountability for war prisoners.

Prominent economists suggest that although recovering such a vast sum may be improbable, the issue should still be highlighted diplomatically in international platforms. This would preserve historical facts and raise awareness among new generations.

During the Liberation War of 1971, Bangladesh’s rightful share of Pakistan’s total assets was 4.32 billion USD — half of which is 2.16 billion USD. Additionally, following the devastating Gorky Cyclone, the international community allocated around 200 million USD for East Pakistan, which Pakistan allegedly took possession of.

According to sources from the Ministry of Foreign Affairs, Bangladesh has three major unresolved demands from Pakistan:

1. An official apology for the 1971 genocide,
2. Compensation for wartime losses,
3. Repatriation of stranded Pakistanis still in Bangladesh.

Bangladesh has consistently reiterated these demands to Pakistan, but there has been no positive response to date.

The Gorky Cyclone of 1970 claimed the lives of nearly 500,000 people in coastal regions including Barisal, Patuakhali, Noakhali, and Chittagong. Out of global humanitarian concern, over 200 million USD was sent in foreign aid for East Pakistan. But that aid money was transferred from the Dhaka branch of the State Bank of Pakistan to its Lahore branch. Pakistan never returned these funds, despite Bangladesh’s longstanding demands.

During his visit to Japan in October 1972, Prime Minister Sheikh Mujibur Rahman told journalists:
“Bhutto is delaying recognition of Bangladesh because doing so would obligate him to share Pakistan’s assets under international law. Pakistani forces have destroyed all our assets. They didn’t even leave behind a single ship or aircraft. Pakistan must quickly recognize Bangladesh and return our rightful assets. I don’t want anything from Pakistan beyond what we are legally entitled to.”

Due to diplomatic challenges, Bangladesh temporarily paused discussions on the matter. However, after gaining official recognition from Pakistan on February 22, 1974, the country began to actively pursue its financial and legal claims.

On April 5, 1974, a tripartite meeting between Pakistan, India, and Bangladesh was held in Delhi. Just two days before the meeting, the government-run newspaper Dainik Bangla published a detailed report outlining Bangladesh’s claims, stating that Pakistan owed 5000 crore Taka in foreign trade liabilities alone. Additionally, the 200 million USD aid meant for cyclone victims was siphoned off by Pakistan to the State Bank in Lahore. According to UNROD (United Nations Relief Operation in Dacca), the war damages amounted to 1.2 billion USD, while the Government of Bangladesh estimated the losses at 1249 crore Taka.

In response, Pakistan became active. On April 19, 1974, the Urdu newspaper Nawa-i-Waqt claimed that Biharis in Bangladesh owned assets worth 5500 crore Pakistani Rupees, and suggested Bangladesh should return those. The intent behind such a counterclaim was to weaken Bangladesh’s financial demands.

Ahead of Pakistani President Zulfikar Ali Bhutto’s visit to Bangladesh in June 1974, the Bangladesh Planning Commission compiled a documented account of the country’s entitlements, including the valuation of Pakistani assets in Bangladesh and Bangladesh’s share of foreign debt during the time of united Pakistan. Two foreign experts, in their research, concluded that even without considering war damages, Pakistan owed Bangladesh 3975 million USD.

During Bhutto’s visit in late June 1974, a draft agreement was presented aiming to normalize relations, which included the issue of asset distribution. Bangladesh claimed 4000 million USD in assets, including 11 million USD in gold and foreign reserves. Pakistan, in turn, claimed 10.88 crore Taka from Bangladesh. Bhutto attempted to sideline the discussions by stating that none of his 100-member delegation included financial experts. However, under pressure from Bangladesh, Pakistan agreed to form a committee to look into the issue — though they clarified they were not prepared to accept the proposal in principle.

Upon returning home, Bhutto criticized Bangladesh’s demands to downplay the failure of his visit. Meanwhile, Bangladesh made it clear that establishing diplomatic and trade relations with Pakistan would depend on asset distribution and repatriation of non-Bengalis (Biharis). As bilateral negotiations stalled, Bangladesh sought international support.

On October 4, 1974, at Heathrow Airport in London, Prime Minister Sheikh Mujibur Rahman told journalists:
“The progress in Bangladesh-Pakistan relations depends on resolving the outstanding issues. We only want our rightful share of the assets. We are not begging for anything.”

After Pakistan recognized Bangladesh on February 21, 1974, Prime Minister Sheikh Mujibur Rahman took a keen interest in resolving the asset claims and other disputes. But following his assassination along with his family in August 1975, the issue lost momentum.

In May 1975, during the Commonwealth Heads of Government Meeting in Kingston, Jamaica, special initiatives were taken to resolve the asset-sharing issue. As part of this effort, UAE Oil Minister Otaiba visited Dhaka on June 18, and then traveled to Pakistan. There was also an expectation that the issue would be raised during the OIC summit in Jeddah in July 1975. Upon returning to Dhaka, Bangladesh’s Foreign Minister hinted at the possibility. Bangladesh continued diplomatic efforts and sought mediation from Kuwait, Saudi Arabia, or the UAE. The OIC summit decided that the matter would again be discussed during the upcoming Non-Aligned Movement Summit in August 1975.

In December 1976, the Government of Bangladesh announced compensation for owners of nationalized industries, which delighted Pakistani businessmen, as many of the nationalized enterprises had been owned by them. Despite protests, the government began paying compensation to some Pakistani companies from 1978 onward. In July 1979, a government order specified that ownership of abandoned properties would be restored only if the claimant was a Bangladeshi citizen.

Many non-Bengali individuals took advantage of the situation and came to Dhaka, obtaining Bangladeshi citizenship certificates, non-option certificates, etc., in exchange for money, and through legal petitions, they managed to reclaim abandoned properties. In most cases, these non-Bengali businessmen, after regaining the properties, sold them and laundered the money to Pakistan or elsewhere.

Moreover, among the loans taken during the Pakistan era, by 1978, Bangladesh had accepted liability for only $13.485 million out of the total $506.761 million worth of completed projects in the then East Pakistan.

According to the Universal Declaration of Human Rights by the United Nations in 1981, Bangladesh witnessed one of the quickest and largest genocides in history. Yet, Pakistan has not officially apologized to this day. In 1998, then Prime Minister Nawaz Sharif described the events of 1971 merely as political instability. Later, in 2002, President Pervez Musharraf visited Dhaka and expressed ‘regret’ but did not acknowledge responsibility for the genocide. However, in the same year, 51 Pakistani civil society organizations formally apologized to Bangladesh and criticized their government for the delayed response.

A 2006 UNHCR survey revealed that around 130,000 Pakistanis were still stranded in Bangladesh. At the time, the Pakistan government, funded by Saudi-based Jamaat-ud-Dawa, had initiated a housing project to repatriate these individuals. A plan was made to construct 5,000 residential units in Punjab Province at a cost of 10 million rupees. However, the funding ceased, halting the project. There was also opposition to this repatriation from several regions in Pakistan. In 2004, the Lahore High Court declared that the Pakistanis residing in Bangladesh were Bangladeshi citizens, further complicating the issue.

In 2009, Bangladesh’s then Foreign Minister Dr. Dipu Moni presented three demands to Pakistan’s special envoy, Zia M. Ispahani. These demands were reiterated in the 2010 Foreign Secretary-level talks in Islamabad. In 2011, newly appointed Pakistani High Commissioner to Dhaka, Afrasiab Mehdi Hashmi Qureshi, was also urged to press for a formal apology. However, during a 2012 visit to Dhaka, former Pakistani Foreign Minister Hina Rabbani Khar responded to Bangladesh’s demands by saying, “We must forget the events of 1971.” Since then, there has been no significant discussion on the matter.

Most recently, in August 2024, following Sheikh Hasina’s fall from power, Pakistan’s Prime Minister Shehbaz Sharif congratulated Professor Muhammad Yunus upon his appointment as the head of Bangladesh’s interim government. A month later, during the sidelines of the UN General Assembly in September, the two leaders held a meeting, hinting at a possible thaw in bilateral relations. Diplomats from both Dhaka and Islamabad have since become more active. As part of this renewed engagement, on April 16, Pakistan’s Foreign Secretary Amna Baloch visited Bangladesh. That day, the sixth Foreign Secretary-level meeting between Bangladesh and Pakistan was held at the State Guest House Padma. Bangladesh was represented by Foreign Secretary Md. Jashim Uddin, while Amna Baloch led the Pakistani delegation. This was the first such meeting in nearly 15 years. Following the talks, Amna Baloch paid courtesy calls to Interim Government Chief Advisor Professor Muhammad Yunus and Foreign Affairs Advisor Md. Touhid Hossain.

The Foreign Secretary told journalists, “We have raised with Pakistan the unresolved historical issues, which include: an official apology for the genocide committed by the then Pakistani armed forces in 1971; the repatriation of stranded Pakistanis; fair distribution of undivided assets; and the transfer of foreign aid meant for victims of the 1970 cyclone.” Now, it remains to be seen what response Pakistan gives.

Sources:
BBC / Preset71 / Bangladesh’s Due Resources from Pakistan / Just Faaland & J.R. Parkinson, Bangladesh: The Test Case of Development, London: C. Hurst and Company, 1976 / New York Times, 9 July 1974 / Bangladesh-Pakistan Relations: An Unresolved Account, Motiur Rahman, Weekly Sandhani