Q&A With Bangladesh P.M. Sheikh Hasina Wajed

Just five years ago, Bangladesh held the unenviable title of being the world's most corrupt country. Today, it's a darling of Wall Street. On the sidelines of the United Nations General Assembly meeting in New York, Prime Minister Sheikh Hasina Wajed, who headed the country in the late 1990s and came back to power in January 2009, sat down with NEWSWEEK's Andrew Bast to discuss economic growth, radicalism, and the power of women. Excerpts:

Goldman Sachs has named Bangladesh one of the "Next 11" emerging markets. Why is your economy so promising right now?

In 2021, we'll observe our golden jubilee of independence, and economic development is our main aim. People need health care, education, housing, and we want to bring the country out of poverty. The economy is mainly based on agriculture. Now we want to industrialize. Through public-private partnerships, we will encourage the private sector. We've opened up energy, telecommunications, and several other sectors. Our target was 5.5 percent, but we will grow 6 percent this year. By 2013, our target is to achieve 8 percent GDP growth.

Some are worried that corruption could prove a spoiler. Is it a threat?

Yes, Bangladesh faced this problem. Now, I can assure you that my government, we are not involved in corruption. In the last 20 months we have proved that we can make progress.

What will your economic relationship with China look like in the coming years?

We have a wonderful relationship with China. We have a joint trade commission, and China is contributing to our development—for instance, in the infrastructure and energy sectors, even our defense.

How is that different from your relationship with India?

Our foreign policy is very clear: we want friendship. With India, as our closest neighbor, yes, we have many problems, no doubt about it. During my last tenure, we had an issue over the sharing of the Ganges' water. So we signed a treaty, peacefully and bilaterally. It was a good sign. There were also about 64,000 refugees in India, and we signed a peace accord and brought them all back. So that reduced tensions. The economic relationship is stable and good, too. We still have disputes over another 54 rivers. A joint river commission has already started working on it. My view is that you have to have a good relationship with your neighbors, so not just India, but with Nepal, Bhutan, Myanmar. We just opened up our port to all these neighbors.

For Washington, the enemy in South Asia is extremism. What's the status of radicalism in Bangladesh?

We still do have extremists. During our last government, they somehow used terrorists against my party and against those who believe in secular democracy, so from 2001 we lost about 21,000 of our party workers, including some of the members of Parliament and a former minister. There was an assassination attempt against me. I survived, but narrowly, no doubt. In the last 20 months, we have done a good job. We know how to face this problem. Though I am a victim of terrorism—I lost family—I survived, narrowly, but even then I didn't bow down to these terrorists. I said I will fight against these terrorists and establish Bangladesh as a peaceful state in South Asia.

Lastly, what's the status of women's progress in Bangladesh?

Do you see me? Our leader of the opposition is a woman. That's true in the Army, administration, judiciary, everywhere. It is my idea, and during my last tenure, I made sure that in each and every sector women should get that opportunity. And as a Muslim woman, I can tell you one thing: that in Muslim leadership, it is nothing new.