Pakistan was hostile to Bangladesh in the early 1970s, but by 1974 it was apparent that the new nation would stand on its own, and in February Pakistan recognized Bangladesh. Diplomatic relations were established in January 1976, followed by the reestablishment of communications and transportation links later in the year. As Bangladesh subsequently adopted a cooler stance toward India, began to move closer to China and the West, and stressed its Islamic cultural heritage, its interests became increasingly similar to those of Pakistan.

Throughout the 1980s, Bangladesh consistently supported Pakistan's policy of opposing Soviet actions in Afghanistan. In 1983 Pakistan's foreign minister signaled the end of an era of animosity when he visited Bangladesh's National Martyrs' Monument at Savar, near Dhaka, which commemorates those killed by Pakistan's armed forces during the war of independence. Pakistan's president Mohammad Zia ul Haq later presented Ershad with the country's highest civil award during the Bangladeshi president's visit to Islamabad in 1986.

After the establishment of diplomatic ties, Bangladesh and Pakistan entered into a wide variety of bilateral agreements. A 1979 cultural agreement arranged for the exchange of teachers, scholars, musicians, folklore troupes, art works, films, and books. Joint economic, commercial, and technical pacts signed after 1978 provided for the exchange of major exports of both countries: jute and tea from Bangladesh, and cotton and cloth from Pakistan.

Two major areas of disagreement remained between Bangladesh and Pakistan as of mid-1988, and both stemmed from the dislocations resulting from the independence struggle. The first issue concerned the finances of united Pakistan. After the war, Bangladesh claimed that it deserved a share of the US$4 billion worth of preindependence exchange, bank credit, and movable assets protected in West Pakistan during the war. In a 1975 agreement, Bangladesh accepted half of Pakistan's pre-1971 external debt, but assetsharing issues remained unresolved. The second issue concerned the emigration of large numbers of people, mostly Biharis (non-Bengali Muslims), to Pakistan. After the war, the International Red Cross registered nearly 540,000 people who wanted to emigrate to Pakistan. By 1982 about 127,000 had been repatriated, leaving about 250,000 people still demanding repatriation. Thousands of people who desired to emigrate lived in poor conditions in so-called "Pakistani Relief Camps," where they received monthly food allotments. In 1985 there was some progress in this area when Zia ul Haq agreed to accept the "stranded Pakistanis." In 1986 Pakistan arranged for their immigration as soon as Ribatat al Alam al Islami (Union of the Islamic World), a voluntary organization based in Saudi Arabia, could mobilize sufficient funds.

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Source: U.S. Library of Congress