Padma Bridge, World Bank and China: A transition is on

Afsan Chowdhury
Thursday, December 7th, 2017
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The Padma Bridge is a historic infrastructure heralding not just the confidence of Bangladesh and its Prime Minister but also of a global transition of clout, power and influence. The World Bank had walked out of funding, citing corruption, and it had seemed that the Padma Bridge was under threat of death but it didn’t happen.

 

Instead PM Hasina used many options available to her to raise the money to initiate the project despite the withdrawal of the World Bank.  This is by all accounts a slap in the World Bank’s large face, for it was expecting the project to collapse.  Later, its officials arrived, embarrassed, apologized and offered their best wishes.  It was an admission of retreat and maybe even defeat at the hands of a ‘third world’ leader and a country they were more used to trashing before.

 

But, more importantly, it was a signal of transition as the multilateral donor agencies led by the US and by the extension the West , moves back a bit to allow China, the new and bigger player on the block, to step in.  In just a few years, there has been a dramatic change in the international lending map as the bilateral donors have lost clout and China, in this region , has moved in. But are we ready to deal with this new reality?

 

Post-Cold war economics

 

The World Bank had largely functioned to stimulate development as understood by its leaders — the US — and in the process became a major player in the Cold War. But once the Cold War was over, its role too changed as its political function declined. The major enemy of the West — the Soviet Union — died and new foes took some time to emerge.  The fundamental advantage the West had during the Cold War was the systemic inefficiency of the Soviet socialist economy which led to its death.

 

The invasion of Kabul was a symptom of the inherent inability of the Soviet system rather than the cause that hastened its fall. By the time the West and the Soviets had managed to sprout Islamic radicalism in Afghanistan, the Soviet Union died and the West gloated that ‘History had ended’, possibly the silliest remark ever made by an intellectual in history. Soon the West was battling an enemy it had helped birth but didn’t understand.  Its economy too began to decline and it completely missed the rise of China. In a way the demise of Soviet socialism was rapidly followed by the decline of Western capitalism as well in the face of capitalist competition.

 

China’s rise between the narrow cracks of two declining powers shows the weakness of conventional Western analytical systems. China has changed both capitalism and socialism, as it claims. It was this great revolutionary change that ensured socialism’s death at least with dignity in China. As the most powerful global capitalist power which is led by a Communist Party, China has achieved a milestone no socialist or capitalist thinker, let alone a state, could ponder.

 

Bangladesh and China

 

China now plays a major role in the construction of the Padma Bridge. China is also the largest lender of concessionary credit to Bangladesh to the tune of five billion dollars in 2018 alone.  During his recent visit, China’s foreign minister defended the interest rates of Chinese loans and insisted that Bangladesh itself should refute allegations that they are expensive, displaying its confidence as a lender.

 

China is the largest regional lender and influences most countries, including both Bangladesh and Myanmar.  Thus while the UN has raised its voice much, it has had little impact on the Rohingya issue. It has raised only 35% of its projected 435 million dollars, thus showing its clout. It shows that in reality, China is calling the shots and is able to ignore UN multilateral concerns.

 

The Myanmar crisis, coming in the wake of the Padma Bridge project progress report, shows the two different perspectives of this reality.  As multilateralism led by the US or the UN declines and China rises, we need to focus more on ways to deal with China rather than express satisfaction that the World Bank was trumped.

 

The World Bank is over, China is here. For us, it is a great opportunity to take advantage of but we need to know how.

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