Dhaka Courier

Bangladesh amid a rapidly changing strategic landscape

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Speakers at a virtual dialogue titled “Bangladesh-China Development Cooperation: Experience and Outlook” organized by the Centre of Policy Dialogue (CPD) on October 29

President of Bangladesh Institute of Peace and Security Studies (BIPSS) Major General (Retd) ANM Muniruzzaman has said Bangladesh needs to remain very careful keeping its national interest protected as strategic landscape in the Asia Pacific region is rapidly changing.

"Strategic landscape is getting changed rapidly. We need to observe it very carefully," he told Dhaka Courier after addressing a virtual dialogue titled 0⁰0“Bangladesh-China Development Cooperation: Experience and Outlook” organized by the Centre of Policy Dialogue (CPD) on October 29.

The security analyst said they (Bangladesh) do not want to join in any defence pact, any defence grouping or any defence aligned grouping.

"Don't become part of military agreements or soft military agreements. We should be very careful in maintaining our status," he said mentioning recent agreement between India and the US.

He laid emphasis on maintaining strategic autonomy which is fundamental to maintaining economic autonomy or economic freedom with competitiveness.

"We, as a first tract developing country, need to have strategic autonomy so that we have economic freedom to cooperate with everybody," Muniruzzaman said.

He said Bangladesh is a signatory of the Belt and Road Initiative (BRI) and at the same time Bangladesh believes the principles of Indo-Pacific Strategy (IPS).

"We want to remain active part of the BRI and at the same time we want to cooperate with the IPS," Muniruzzaman said emphasising on taking maximum advantage of both the initiatives for national interest.

He said Bangladesh has to be extremely cautious in navigating the new complex world avoiding taking any side.

In November 2017, US President Donald Trump outlined a vision for a free and open Indo-Pacific in which all countries prosper alongside as sovereign, independent states.

This vision, the US said, is based on values that have underpinned peace and prosperity in the Indo-Pacific for generations, according to the US government.

It said free, fair, and reciprocal trade, open investment environments, good governance, and freedom of the seas are goals shared by all who wish to prosper in a free and open future.

Muniruzzaman said Bangladesh is a key maritime nation and provides a critical maritime space making it attractive to China and other countries.

Terming China Bangladesh's strategic and largest trading partner, the expert suggested Bangladesh to explore opportunities beyond traditional cooperation.

He laid emphasis on cooperation in the areas of green economic development, smart agriculture, smart city development, water and river basin management, regional and sub regional cooperation and opportunities in the post COVID-19 era.

Muniruzzaman said Bangladesh and China have a multiple channel of cooperation. "We have excellent people to people relationship.

China is our biggest military hardware provider too," he said. On COVID-19 vaccine, Muniruzzaman said Bangladesh needs to keep all doors open to get access to affordable vaccine quickly.

He said Bangladesh needs to have the capacity to negotiate a good and affordable price of the vaccine which comes out first in the market. Bangladesh is now in touch with India, China and Oxford vaccine.

Muniruzzaman laid emphasis on exploring external funding for the vaccine to make it available for all in Bangladesh.

Tensions with China

The Indo-China and US-China tensions can have a "deep negative shadow" on cooperation within the region, including Bangladesh's economic cooperation with China, two foreign relations analysts who participated in the dialogue said.

They mentioned the standoff between Indian and Chinese soldiers in Ladakh following the killing of 20 Indian soldiers in June and the US' relations that reached lowest level in decades over coronavirus pandemic, trade war and the tensions in Hong Kong, Taiwan, South China Sea.

Bangladesh Enterprise Institute President M Humayun Kabir said he can see interference by third countries over bilateral cooperation, something that was not observed before.

"For example, we have recently seen India and China's competition at the Dhaka Stock Exchange," he said.

Kabir also said geopolitics is getting mixed up in projects like Sylhet's airport expansion project and Teesta basin management project.

He sees more difficulty ahead as Bangladesh goes to develop more connectivity and blue economy projects.

Muniruzzaman also echoed Kabir and said the standoff between China and India at Ladakh has a negative shadow in South Asia, particularly because India is Bangladesh's very large neighbour and has deep connections to Bangladesh both in economic and political spheres.

"I see there is a chance of a new cold war," he said, adding that if that comes about then all countries including the countries like Bangladesh may have to re-navigate pathways again, as "we reshape our bilateral and multi-lateral relationship with countries including our relationship with US and China".

The situation may force Bangladesh to choose a side, the analyst said, warning that Bangladesh should avoid taking any side at all cost.

Growing Chinese Interest

Bangladesh has laid emphasis on enhanced trade and investment cooperation with China amid an increased interest among Chinese investors to invest in growing Bangladesh.

"We are working very closely with the Chinese authorities to know the need of the Chinese importers," said State Minister for Foreign Affairs M Shahriar Alam.

Shahriar said there is an increasing interest of investment in Bangladesh and investment will continue to grow in the exclusive economic zone in Anwara upazila of Chattogram on 800 acres of land.

He reiterated Bangladesh's commitment on having closer economic cooperation with China for mutual benefit.

Referring to high level visits between the two countries, Shahriar said there will be more such high level visits once the COVID-19 situation improves.

On infrastructure issues, the Srate Minister said the infrastructure gap will not be widening rather it will be narrowing down amid huge works in place.

Vaccine diplomacy, Rohingya crisis, global initiatives like Belt and Road Initiative (BRI) and Indo-Pacific Strategy (IPS) were also discussed.

More Investment in Bangladesh

Chinese Ambassador to Bangladesh Li Jiming expressed optimism over more investment cooperation with Bangladesh in high-tech fields such as 5G telecommunications, high-speed railway, aerospace and blue economy.

"I am very optimistic about the future of China's investment in Bangladesh," he said recognizing the continuous economic and social development of Bangladesh.

He said China's investment in Bangladesh will not only maintain the lead in net inflows, but also lead other foreign capital sources in terms of FDI (foreign direct investment) stock in Bangladesh.

The Chinese Ambassador was addressing a virtual dialogue organised by the Centre for Policy Dialogue (CPD).

The Chinese Ambassador said there is still much room for improvement in Bangladesh’s services for investors and some institutions in Bangladesh are not efficient enough.

He said vocational skills training in Bangladesh needs to be strengthened.

Emphasising on increased political mutual trust, Ambassador Jiming said the Chinese Embassy will continue to work diligently to promote the continuous development of bilateral relations, and facilitate the baking of a bigger cake of mutually beneficial and pragmatic cooperation between China and Bangladesh.

He said under the "Belt and Road" initiative, Chinese investors have enthusiasticly participated in Bangladesh's economic construction and contributed to the economic and social development of Bangladesh and the improvement of the welfare of local community.

"The Chinese Embassy, together with our friends here, will continue to make the “Belt and Road” initiative more popular in Bangladesh, allowing more participants to benefit from “Belt and Road” cooperation and achieving multi-win," he said.

In recent years, the Ambassador said, China-Bangladesh PPP cooperation has become more popular, and important power plants, such as Payra power plant, have adopted the PPP cooperation model.

"Promoting the signing of currency swap agreement MOU on PPP cooperation can better promote investment cooperation and provide financing for a large number of high-quality projects in Bangladesh," he said.

Development Cooperation

CPD Executive Director Dr Fahmida Khatun said Bangladesh and China currently maintain a strong  bilateral  partnership which is strategically significant for both countries.

In recent years, she said, both economic factors and proactive foreign policy have facilitated Sino-Bangladesh economic relations to grow manifold. "This spans from aid to trade to investment to education and health."

Dr Fahmida said since Bangladesh’s independence, China has committed a total of USD 3.33 billion in aid to Bangladesh, of which USD 2.8 billion had been disbursed until 20 December 2019.

About 99% of China’s aid to Bangladesh, both committed and disbursed, has been project aid, she said.

Also, Chinese aid consisted of 2.34% of total foreign aid committed and 3.26% of the total foreign aid disbursed to Bangladesh since the country’s independence.

On the other hand, the economist said 88% of Chinese aid committed and 98% of Chinese aid disbursed to Bangladesh has been in the form of loans.

The CPD economist said large Chinese FDI is observed in the power sector of Bangladesh.

China has invested around USD 11.51 billionin the power and energy sector of Bangladesh during the period 2009-2019.

Dr Fahmida said Bangladesh is set to graduate from the Least Developed Country (LDC) by 2024 and become an upper middle-income country by 2031 and an advanced country by 2040.

She said these milestones will bring both  pride and challenges.

Because of LDC graduation Bangladesh will  lose several international support measures, including duty free access of its products to the global marketandconcessional  funds.

Besides, Dr Fahmida said, the western  developed countries are also facing financial  stress themselves.

Covid-19 pandemic has added further  challenges to the progress of the economy, she said.

Dr Fahmida said many achievements made by Bangladesh is apprehended to be undone due to the negative impact of COVID-19.

"As  a  result,  the  progress  towards  achieving  the  Sustainable  Development  Goals (SDGs) will be challenging. Therefore, not only to move forward but also to protect the successes, Bangladesh will have to make higher investments."

She said Bangladesh needs to identify the priority areas in the education and leverage Chinese funding.

The economist said Bangladesh also needs investment in research and developmentWhere China can support, particularly in thearea of science and technology.

Transparency

Some observers think that Chinese investments do not give adequate attention to the governance issues e.g. compliance with various international standards, such as labour, environment, legal protection, procurement, good governance practices etc, she said.

The economist said the quality of investment will depend on how much these concerns are addressed by both the government.

"Therefore, more transparency is needed on these issues.In this respect data on various types of investments, their terms and conditions, monitoring etc.should also be made availablefor public consumption," she said.

Bangladesh Ambassador to China Mahbub Uz Zaman, former Bangladesh Ambassador to USA and President, Bangladesh Enterprise Institute (BEI) M Humayun Kabir, CPD distinguished fellows Dr Debapriya Bhattacharya, Prof Mustafizur Rahman, Bangladesh Institute of Peace and Security Studies (BIPSS) President Major General (Retd) A N M Muniruzzaman, Chief Executive Officer, Hongkong and Shanghai Banking Corporation Limited Bangladesh Md Mahbub Ur Rahman, Prof Cheng Min and Dr Wang Shida, among others, took part in the discussion chaired by CPD Chairman Prof Rehman Sobhan.

This year marks the 45th anniversary of Bangladesh-China diplomatic ties.

During the past decades, development cooperation between Bangladesh and China has increased significantly, the speakers said. The objective of the event was to review Bangladesh’s economic relationship with China and discuss the outlook for future bi-lateral partnership through investment and trade.

  • Major General (Retd) ANM Muniruzzaman
  • Bangladesh Institute of Peace and Security Studies (BIPSS)
  • Rohingya Crisis
  • Centre for Policy Dialogue (CPD)

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