Bangladesh News Bangladesh - India Relation

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Bangladesh has offered to dispatch, on emergency basis, medicines and medical equipment in view of the rapidly deteriorating coronavirus situation in India.

The medical supplies include approximately 10,000 vials of injectable anti-viral, oral anti-viral, 30,000 PPE kits, and several thousand zinc, calcium, vitamin C and other necessary tablets, Bangladesh foreign ministry said in a statement issued today.

Bangladesh government expresses deep sorrow and condolences at the loss of lives in India due to Covid-10 pandemic, added the statement.

"Bangladesh stands in solidarity with close neighbour India at this critical moment and is ready to provide and mobilise support in every possible way to save lives," the statement reads.

The thoughts and prayers of the people of Bangladesh are with the people of India for alleviating their sufferings. Bangladesh is interested to provide further support to its neighbour, if needed, the ministry also said in the statement.

 

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India's prime minister, Narendra Modi, will visit Dhaka in March to join the celebrations marking 50 years of Bangladesh's independence and the establishment of diplomatic ties between both countries.

The trip is likely to symbolize the decades-old friendship between the two neighboring South Asian nations, but all is not well in the bilateral partnership.

At the beginning of 2021, a controversy erupted over the delivery of the vaccine developed by Oxford University, and AstraZeneca, which has a partnership with the Pune-based Serum Institute of India (SII) to manufacture the vaccine.

SII CEO Adar Poonawalla said that India had barred Serum from selling doses on the private market until everyone in India had received the vaccine.

The statement caused a flutter in Bangladesh, which had inked a deal with India last year to receive 30 million doses of the vaccine. Many Bangladeshis felt that India was backsliding on its obligations as part of the agreement. Some took to social media labeling India as an untrustworthy neighbor.

Poonawalla later issued a statement clarifying that exports of the vaccines were permitted to all countries, and Bangladesh's Foreign Minister A.K. Abdul Momen confirmed that his country was on track to receive the vaccine.

Still, the experience left a bad taste in Bangladeshis' mouths.

"The statement by Poonawalla on the coronavirus vaccine created ripples in Bangladesh because it made no sense to deny us the vaccine after we inked a deal," Lailufar Yasmin, associate professor at the University of Dhaka in Bangladesh, told DW.

Unkept promises cause mistrust​

Yasmin pointed out several instances when Dhaka felt that India didn't live up to its promises.

In September 2020, Bangladesh asked India to resume onion exports to the country, after New Delhi abruptly slapped a ban on exports.

India is the biggest supplier of onions to Bangladesh, which buys a yearly average of more than 350,000 tons. Following the export ban, onion prices in Bangladesh jumped by more than 50%, prompting the government to procure supplies from elsewhere and provide onions at subsidized rates.

"India has historically had a good relationship with Bangladesh but has missed many opportunities to cement the relationship," Yasmin said.

Water woes​

In December 2020, both countries held a virtual summit where they discussed topics like boosting trade, investment and transportation links, but avoided the thorny issue of sharing the water of the Teesta river, which flows into Bangladesh from the Indian states of Sikkim and West Bengal.

Bangladesh, being the downstream country, wants India to share more water from the Teesta, but New Delhi has so far been unable to strike a deal on the matter, likely due to strong opposition from West Bengal state.

Two politicians from the Trinamool Congress (TMC), the ruling party in West Bengal, said a solution may not be in sight for the foreseeable future as the glaciers feeding water into the Teesta increasingly melt and heighten the risk of drought in several parts of the state if the river water were shared with Bangladesh.

"For India to share water, possibilities have to be explored on how the people of northern West Bengal can be compensated in the lean season. Otherwise, the Teesta river is liable to dry up like the Ganga did when we inked the Ganga water sharing deal in 1996," said Sukhendu Sekhar Roy, a member of the upper house of India's Parliament from the TMC party.

"Kolkata port has now become dead because of the diversion of water to Bangladesh. In addition, arsenic is being found in several areas as the ground water level has gone so low, endangering millions of lives. That experience has made Bengalis bitter, so they are apprehensive about sharing the waters of the Teesta," he added.

India's federal government in New Delhi is serious about resolving this river water issue with Bangladesh, said Joyeeta Bhattacharjee, a senior fellow with the Observer Research Foundation (ORF), a New Delhi-based think tank.

"But we need to understand that West Bengal is a major stakeholder in the resolution of the Teesta matter. If West Bengal doesn't change its stance, then it's difficult to ink a deal," the expert told DW.

China vies for Bangladesh's attention​

While India strives to resolve the Teesta issue with Bangladesh, China stepped in and offered $1 billion (€830 million) to Bangladesh for an irrigation project on the river. Some experts believe Bangladesh simply wants to benefit economically from its partnership with Beijing.

"Bangladesh, like most nations, will sign up for something for its economic benefit. The country has disagreements with China on several issues, so it's wrong to assume that economic deals with China will make Bangladesh move away from India," Bhattacharjee underlined.

"As India hasn't resolved the Teesta matter, Bangladesh was forced to look toward China for assistance. India still has time to take action so that we don't have to seek help from China," said Imran Saleh Prince, the organizing secretary of the Bangladesh National Party (BNP).

Subir Bhaumik, editorial director of The Eastern Link news site, believes that India's poor relations with its neighbors may have pushed Dhaka towards Beijing.

"India's relations with its neighbors have suffered under PM Modi. Sheikh Hasina, India's most trusted ally in South Asia, has every reason to be upset because the Teesta water sharing treaty has not happened. Her government and people worry over New Delhi's controversial Citizenship Amendment Act (CAA), the border killings and worse, the utter humiliation of being called 'termites' by (India's Home Minister) Amit Shah."

Pakistan joins the fray​

Pakistan, China's closest ally in the region, has also been trying to mend ties with Bangladesh, even though some observers say that any substantial rapprochement between Islamabad and Dhaka depends on Pakistan's willingness to acknowledge the atrocities it conducted in former East Pakistan, today's Bangladesh, during the 1971 war of independence.

The Bangladesh government says Pakistani forces killed 3 million people during the war.

There's a long way to go before we can start talking about a normalization in Pakistan-Bangladesh ties, experts agree.

Nevertheless, Salman F. Rahman, a Cabinet minister and co-founder of the Beximco Group, a Bangladeshi conglomerate, has been working "behind the scenes" to mend relations with Pakistan, according to a source that wished to remain anonymous.

Beximco is the company responsible for distributing 3 million doses of the AstraZeneca vaccine in Bangladesh, reflecting the power concentrated in the hands of Rahman.

Despite the efforts, experts stressed that it is too early to predict a permanent shift in Bangladesh's foreign policy in siding with China and Pakistan over India, and that Dhaka should be careful regarding its foreign policy and strategic choices.

 

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Bangladesh will hand over 10,000 vials of injectable anti-viral Remdesivir to India on Thursday, officials have said.

Bangladesh Deputy High Commissioner in Kolkata, Toufique Hasan, will formally hand over the consignment to the Indian authorities. The assistance from Bangladesh is being given to India at a time when the country is facing its worst Covid-19 outbreak with close to 4 lakh infections and around 3,500 deaths a day, with Delhi and Maharashtra being the hotspots.

India has been facing acute shortages of oxygen and the hospitals are overwhelmed by the sheer number of patients.

Against this backdrop, Bangladesh, which is also going through the second wave of infections and is maintaining restrictions, has offered to dispatch medicines and medical equipment to India on an emergency basis.

The medical supplies offered include approximately 10,000 vials of injectable anti-viral, oral anti-viral, 30,000 PPE kits, and several thousand zinc, calcium, vitamin C and other necessary tablets.

"The first consignment will be handed over to Indian officials Thursday," said Bangladesh High Commissioner to India Muhammad Imran.

"We are ready to provide more support to India," he told our correspondent.

Meanwhile, foreign ministry officials said the ban imposed on travel through land borders with India from April 26 to May 9 may be extended.

An inter-ministerial meeting will be held Thursday on the issue, said a foreign ministry official.

 

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Over the last decade, West Bengal Chief Minister Mamata Banerjee has been widely known in Bangladesh for her last-minute opposition to the Teesta water-sharing deal that could not be signed during the then Indian prime minister Manmohan Singh's visit to Dhaka in 2011.

Now, upon any Indian dignitary's visit to Dhaka, the most prominent question is when the Teesta deal will be signed.

The response is always that it depends on West Bengal, as "the Indian constitution guarantees the state's right to say on international agreements on transboundary rivers".

As India's ruling party BJP conducted a major campaign spree in West Bengal before the polls, it had indicated the signing of the deal if BJP won the polls.

Even though the BJP bagged 77 seats in the assembly polls -- a significant advancement from the three seats it won in 2016 -- it is the Trinamool Congress, led by Mamata Banerjee, which has secured 213 of the state's 294 constituencies and is forming government for the third consecutive term.

Bangladesh Foreign Minister AK Abdul Momen congratulated her for her victory.

"We believe, with your cooperation and commitment, the relations between the two countries will strengthen further and help resolve any outstanding issue," he said in a message sent to Mamata yesterday.

However, is the much-talked about Teesta issue really going to be resolved?

Former foreign secretary Touhid Hossain says the Teesta deal is not dependent on who's in power in West Bengal. It has been hanging for long and is likely to remain the same for a while longer.

"Teesta is not anymore an issue of water but of politics. Even if the BJP won the West Bengal election, it would not go for signing the treaty to share water with Bangladesh and give Mamata Banerjee an issue for politics," he told The Daily Star on Monday.

He said the argument that Mamata uses with regard to the water-sharing treaty is that "there is no water [enough to share] in the Teesta", which is just not right.

Teesta is a relatively small river and it is obvious that it will have less water during the dry season. If there was a good will, that water could be shared as the international law says the lower riparian country will have a share of water from the upper riparian country.

Amena Mohsin, professor of Dhaka University's International Relations Department, echoed the same.

"I don't think the Teesta deal would be signed even if BJP would come to power in West Bengal because it is not actually a state issue, but a central government issue," she said, adding that any international deal is signed by the central government, not the state government.

She said Mamata Banerjee has been saying that there is little water in the Teesta during dry seasons.

But that too is because the central government built a dam over the Teesta in Sikkim, blocking the water flow downstream and diverting it somewhere else, Amena said.

She further said if there was no dam, there would be more water in the Teesta and Mamata could not have given this argument then.

So, Teesta deal does not depend on the party in power in West Bengal. Any party in power there would use the Teesta issue for political gains, she thinks.

"If we are to address the river water issue, we need to go for a regional approach. We should go for basin wide management of rivers. We should also engage China here as an upper riparian country," she said.

Both the foreign policy analysts also agree that the Trinamool coming to power in West Bengal is positive because it has a secular ideology against BJP's religious and nationalistic one, with their top leader even making indecent remarks on Bangladesh.

"West Bengal is an Indian state bordering Bangladesh. It's positive that there's a secular party in West Bengal," he said.

Amena Mohsin observed that the BJP has been practising politics of deep polarisation.

"Wherever it is, we must get out of politics that creates divisions among people, politics that nourishes hatred against any particular sect of the society," she said.

Foreign Minister Momen, in his congratulatory message, said he is thankful to Mamata as she spiritedly upheld the long-cherished values of Bengal -- the principles of religious harmony and brotherhood that Bangabandhu spearheaded throughout his life.

 

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Biman Bangladesh Airlines operated four chartered flights to India from China since May 17 to send different medical equipment including oxygen cylinder and oxygen concentrator to the neighbouring country.

A second wave of coronavirus in India has overwhelmed hospitals and caused a shortage of oxygen, leaving many helpless as they try to treat their sick relatives at home. This desperate search for oxygen often ends in grief, reports different media.

"We have operated four special flights to India from China from May 17 to May 20 to send various medical equipment to our neighbouring country which is now battling from Covid-19," Dr Abu Saleh Mostafa Kamal, managing director and CEO of Biman, told The Daily Star.

In a show of friendship for neighbouring India and from the humanitarian ground, we operated those chartered flights apart from looking into our business interest.

Sources at Biman said negotiation is going on with India to operate 17 more charted flights to India from China to send different medical equipment to India.

 

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Biman Bangladesh Airlines operated four chartered flights to India from China since May 17 to send different medical equipment including oxygen cylinder and oxygen concentrator to the neighbouring country.

A second wave of coronavirus in India has overwhelmed hospitals and caused a shortage of oxygen, leaving many helpless as they try to treat their sick relatives at home. This desperate search for oxygen often ends in grief, reports different media.

"We have operated four special flights to India from China from May 17 to May 20 to send various medical equipment to our neighbouring country which is now battling from Covid-19," Dr Abu Saleh Mostafa Kamal, managing director and CEO of Biman, told The Daily Star.

In a show of friendship for neighbouring India and from the humanitarian ground, we operated those chartered flights apart from looking into our business interest.

Sources at Biman said negotiation is going on with India to operate 17 more charted flights to India from China to send different medical equipment to India.

It's a gesture we must appreciate. Thanks to Bdesh and its citizens for standing by India in its time of need.
 

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Agartala: Tripura. which has a century old tea growing history, wants its teas to be auctioned again in Bangladesh, 56-years after exports through East Pakistan’s Chittagong tea auction centre stopped in the aftermath of the 1965 war.

Tea growers in Tripura want to sell their teas through neighbouring Bangladesh’s Sreemangal tea auction centre, just 10 km away from the Tripura northern border.

“Tripura has always had a problem of auctioning tea as there is no auction centre in the state. Tripura Chief Minister Biplab Kumar Deb has asked the Government of India to take up with Bangladesh so that planters from Tripura can auction their produce at Sreemangal, which is near the Tripura border, Chairman of the Tripura Tea Development Corporation (TTDC) Santosh Saha told PTI.

Tripura has some 58 tea gardens – 42 of which are individually owned, another 13 are run by cooperative societies while three are run by the TTDC. Besides, there are nearly 3,000 small tea growers in border state.

Interestingly, Tripura’s gardens were pioneered by Indian tea entrepreneurs as the then ruler of the state, Maharaja Birendra Kishore Manikya, had a policy of not allowing British planters to buy land in his state.

Currently, growers here depend on far away auction centres in Guwahati and Calcutta to sell their produce, increasing costs. Till the 1965 war with Pakistan when travel and trade between the two neighbouring nations were easy, Tripura’s tea used to be sold through the Chittagong auction centre and exported out of the port there. The war and subsequent rift in trade ties disrupted this arrangement.

Manager of the Laxmi Tea Company, Manas Bhattacharya said, Absence of tea auction centre in Tripura is a major hurdle for sending the produce to the countrys main markets or to export tea abroad.

Planters hope that if they can sell through Sreemangal auction centre, then exports could also happen through Bangladeshs Ashuganj or Chittagong ports.

The agro-climatic condition is favourable for tea production in Tripura. Now we have got a logo approved for Tripura tea, to compete with Assam and Darjeeling Tea as well as other established brands, Saha said.

The state-run Tripura Tea Development Corporation is also trying to directly retail tea by selling `Tripureswari branded packets and reaching out to people through Public Distribution System (PDS), officials said.

We have three tea gardens, where we produce slightly more than eight lakh kg tea per year and sell the entire productions through PDS system. Now, we are trying to produce more tea because the demand is very high, Saha added.

Tea production began in Tripura at the Hiracherra tea estate in Unakoti district in 1916. As per latest reports, 6,885 hectares of land is under tea cultivation in the state, officials said.

The north eastern state currently produces over 3.58 crore kg green tea leaf annually.

 

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SINGAPORE (Reuters) - India’s H-Energy, a natural gas company, said late on Wednesday it has signed a memorandum of understanding (MoU) with Bangladesh’s state-run Petrobangla for the supply of re-gasified liquefied natural gas (LNG).

It added that both firms will finalise a long-term supply agreement to start the supply of LNG to Bangladesh through a cross-border natural gas pipeline.

H-Energy said it has been authorised by the Petroleum and Natural Gas Regulatory Board (PNGRB), a regulatory body in India, to build, own and operate the pipeline.

The Kanai Chhata-Shrirampur natural gas pipeline will connect H-Energy’s LNG terminal in West Bengal, passing through various regions of the state and connecting to the Bangladesh border, it added.

H-Energy said its wholly owned subsidiary HE Marketing private will be responsible for sourcing LNG and for supplying R-LNG to Petrobangla.

The company added that it will commission its floating storage and regasification unit (FSRU) at the Jaigarh port in Maharashtra in July, this year. The terminal, which has been delayed on several occasions, is planned to be capable of handing four million tonnes per year.

H-Energy is also constructing LNG re-gasification terminals on the east coast of India at Kakinada, Andhra Pradesh and at Kukrahati, West Bengal.

 

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India today termed Indian Air Force Chief R K S Bhadauria's recent two-day visit to Bangladesh as "highly significant".

Bhaduaria visited Bangladesh at the invitation of his counterpart Air Marshal Shaikh Abdul Hannan, chief of air staff of Bangladesh Air Force and reviewed the passing out parade and commissioning ceremony at Bangladesh Air Force Academy (BAFA) in Jashore on June 28, reports our New Delhi correspondent.

"This occasion also marks the first instance when any foreign Chief was invited to review the parade as the Chief Guest – a reaffirmation of the strong bonds of friendship and trust between India and Bangladesh and their Armed Forces," the Indian defence ministry said in a statement.

Bhadauria's two-day visit was "highly significant in view of the golden jubilee of the historic victory in 1971 war for liberation of Bangladesh", the statement said.

While addressing the graduating trainees on parade, the Indian IAF chief complimented them for an excellent parade and noted the rapid progress being made in all aspects of military level interactions, with bilateral defence cooperation having become an important pillar in the deep historical and fraternal ties between India and Bangladesh, the statement added.

Bhadauraia "described this event as a reflection of the excellent state of professional relationship between the two Air Forces based on mutual trust and understanding."

He expressed confidence that his presence in BAFA during the historic 50th year of Bangladesh's independence would reinforce the already strong and multi-dimensional partnership between the Bangladesh and India.

During his stay in Bangladesh, the Indian Air Force chief held discussions with the Bangladesh Air Force Chief of Air Staff Air Marshal Shaikh Abdul Hannan as well as the chief of army staff and principal staff officer of the armed forces division when "matters of mutual interest and avenues to further strengthen the all-encompassing defence cooperation were discussed".

He also interacted with the Indian High Commissioner to Bangladesh Vikram K Doraiswami during his stay in Dhaka.

 

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A reminder for New Delhi: India isn’t Bangladesh’s gatekeeper anymore​

India plays a critical role in shaping how the world views Bangladesh. But it’s reached an inflection point.​

Adam Pitman

Jun 21, 2021 · 09:30 am

A new generation of Bangladeshis are defining their country. They came of age in the 2013 Shahbagh protests. They started working amid unprecedented growth. Now they’re setting out their values.

This generation makes up a third of the population.

Women that entered the workforce have their sights set on equality and empowerment. Graduates are finding jobs at aid agencies and tech companies. Startups are creating new market opportunities.

Dhaka is scrambling for trade and investment from across the world.

It’s rare to open a newspaper in Bangladesh and not find stories about country’s future. Yet these stories rarely make it outside the country. And when they do, they are reframed as esoteric questions about the country’s development or foreign relations – often from an Indocentric perspective.

Increasingly, though, efforts to repurpose Bangladesh have proven out of touch. And it’s reached an inflection point. India isn’t dealing with the Bangladesh it used to know.

This came into sharp focus when commentators began framing Bangladesh’s relationship with China as a problem for India. Their rhetoric questioned Dhaka’s decision-making and Bangladeshis’ loyalties. But more than anything, it showed that many couldn’t rationalise the country Bangladesh has become.

Indo-China relationship​

The media’s news cycle started just over a year ago.

On April 17, 2020, India announced restrictions for investment from China. Just over two weeks later, on May 5, the first border clashes occurred between Chinese and Indian troops.

China’s existential threat had become tangible for many in India.

The Rashtriya Swayamsewak Sangh was ready for the front. Protesters burned effigies. Resident welfare associations boycotted Chinese made goods. Delhi’s Defence Colony declared war. It marked an intensification of anti-China sentiment that surfaced following the Covid-19 outbreak.

The media in India soon dragged Bangladesh into the fray.

A trade concession from China became a sign that Bangladesh was tilting away from India. The symbolism of diplomatic events legitimised fears that China would encircle India. Old news about China’s trade, investments and contracts with Bangladesh resurfaced as threats to India.

None of the speculation was substantiated. But it muddied the water sufficiently.


Global publishers produced headlines that ranged from sophomoric (“Two-timing – As Bangladesh’s relations with India weaken, ties with China strengthen”) to suspect (“Can China and Pakistan profit as Bangladesh turns from India?”) and severe (“China’s economic clout chills Bangladesh-India relations”).

Some journalists engaged in circular reporting. They repeated claims made by others without scrutiny. Others interviewed experts who described the media echo chamber as geopolitical competition. They conflated public discourse with real events.

Commentators had a field day.

What Beijing’s relationship with Dhaka meant for New Delhi had remained an open-question for years. But the question took on a new urgency in light of the military crisis in Ladakh. Whether Beijing would use trade and investment to influence Dhaka for strategic gain became a focal point.

‘Debt trap diplomacy’​

Few explained how this could be achieved. Those who tried referenced the debt trap diplomacy theory, explicitly or implicitly. The theory has clouded thinking on Bangladesh for years.

According to this theory, Beijing convinced Dhaka to sign loans Bangladesh couldn’t afford. Beijing would then use its loans to influence Dhaka’s decision-making, or even seize infrastructure.

It looks far-fetched in plain English. But that’s what debt trap diplomacy means.

The term is most commonly used as a dog whistle by experts or officials interviewed by journalists. It’s hard to substantiate though. Journalists end up describing projected investment figures, or high-profile infrastructure projects, lending credence to theory’s narrative logic.

This creates a false balance between speculation and research that has debunked the theory. There may be many good reasons to worry about China. But debt trap diplomacy isn’t one. Let alone in Bangladesh, where Dhaka has, understandably, not borrowed more than it can afford.


It’s not clear why so many bought into this false narrative.

Was New Delhi taking a page from US spoiler Steve Bannon and “flooding the zone with shit”? It may have appealed to those who felt Beijing had bought strategic advantage from Dhaka.

The simplest explanation, though, is that stakeholders were experiencing a moment of weakness. While grappling with the loss of ground in Ladakh, it was easy to imagine the loss of face in Bangladesh.

India’s Neighborhood First and Act East policies are vague. China’s Belt and Road Initiative isn’t. China’s perceived influence in Bangladesh gave India a renewed sense of purpose.

This evolved into an “imaginary competition” for the chattering classes, according to Smruti S. Pattanaik, a research fellow at Institute for Defence Studies and Analyses.

They were shadowboxing.

China and India were predominant in this construct. It failed to acknowledge that Bangladesh has an array of economic partners, limiting the relevance of the zero-sum thought experiment.

Bangladesh gets most of its imports from China and India, but it’s offset by exports to the European Union and United States. China is a major investor in Bangladesh. But it held just 5.5% of Bangladesh’s foreign direct investment stock in 2020, well shy of several other countries, as well as Bangladesh largest investor, the US, which held a 20.9% share.

Beijing and New Delhi aren’t an either-or proposition. But the fallacy distorts thinking in other ways too.

When China’s “gain” in a Bangladesh is viewed as a “loss” for India, decision-makers in New Delhi may conflate Beijing’s interests with their own. Concerns over the number of Chinese companies building infrastructure in Bangladesh serve as a good example.

Many feel Indian companies should be more involved in projects that showcase Bangladesh’s rise. This interest, however, isn’t one the private sector can fulfil. Indian companies aren’t well-positioned to compete with companies from China – and other developed countries – for tenders in Bangladesh.

That reflects a disconnect between the role India can play and the role many want it to play.

When decision-makers try to bridge gaps like this with hubris, it can lead to overreach. This is what happened about ten years ago in Africa, where China’s growing market share inspired India’s government and private sector to find a judaad. It ended in corruption, fraud, and failure.

There is good news for Indians and Bangladeshis though.


Speculative commentary hasn’t compromised efforts to integrate the economies of India and Bangladesh. These efforts hold far more promise than any competition between China and India.

If the countries implement the Motor Vehicles Agreement, and sign a free trade agreement, India’s exports to Bangladesh increase by at least 172%, and Bangladesh’s exports to India by 297%.

This trade will raise income levels, and lower consumer prices, for Indians and Bangladeshis. Recent rail and maritime agreements should encourage a similar chain-like effect too.

It’s nothing to sniff at. These efforts lay a foundation for more lucrative trade agreements.

India and Bangladesh are members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. The seven-country grouping wants to do an free trade agreement.

That free trade agreement would increase trade by 500% between BIMSTEC member countries.

China provides nothing more than background noise for dialogue over these opportunities. But politicians will need to show more backbone to prioritise national interests over special interests.

Free trade has become taboo in New Delhi. “Davos men” never sold “India’s story” to India. Politicians now advocate protectionism to achieve a Atmanirbhar Bharat or self-reliant India. Special interest groups don’t care that the domestic market is too small to generate strong growth on its own.

Dhaka has embraced their country’s export-led growth. But it has also shown a lack of enthusiasm for reforms needed for agreements with exporters’ largest markets. That’s a shame. Those reforms could address the concerns of multinationals that answer to consumers who want ethical supply chains.

These political concerns don’t have long shelf life though.

And the promise of connectivity and trade will remain undeniable. It’s an opportunity entrepreneurial people are unlikely to let down. Politicians could do a lot worse than getting in front of the parade.

This is the first in a five-part series on the India-Bangladesh relationship.

Adam Pitman is an analyst and editor based in South Asia. His Twitter handle is @ar_pitman.

 

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At a time when the security of water bodies have gained utmost importance, be it due to illegal fishing or terrorist activities, the Garden Reach Shipbuilders and Engineers Ltd. (GRSE) Kolkata have yet again managed to further strengthen the ties between India and Bangladesh by bagging an order to manufacture six patrol boats for Bangladesh.

The GRSE, a mini-Ratna category- I defence PSU and a leading warship building company, bagged an order to build six patrol boats for sustainable coastal and marine fisheries projects under the Department of Fisheries, Government of Bangladesh.

The order has been awarded to GRSE through international competitive bidding where other international players from Europe and Asia were in the fray, said the spokesperson.

The 13 metres surveillance patrol boats for Marine Fisheries Surveillance Check-post (MFSC), Government of Bangladesh, will be used in surveillance activities, shallow water operations and patrolling fishing grounds day and night for illegal fishing gear and retrieval of survivors. The patrol crafts will be fitted with a water jet drive, suitable for shallow water operation up to 0.60 metres.

It may be noted that GRSE has the distinction in exporting the first ‘Made in India’ warship when the shipyard delivered a multipurpose offshore patrol vessel (OPV), ‘CGS Barracuda’ to the Mauritius Coast Guard.

In recent times, the shipyard had also delivered a Fast Patrol Vessel (FPV) to the Government of Seychelles and bagged an order on competitive bidding for construction and supply of one ocean-going passenger & cargo vessel for the Republic of Guyana.

The shipbuilding company has been an exporter of prefabricated steel bridges to friendly countries like Nepal, Bhutan, Myanmar and Sri Lanka for use in disaster management.

GRSE has made a significant contribution towards ‘Atmanirbhar Abhiyaan’ through advancement in state-of-the-art warship design and construction by achieving over 90 per cent indigenous content onboard ASW Corvettes and Landing Craft Utility ships.
The company said, “Having modernized our infrastructure facilities, today GRSE is in a position to construct 20 warships concurrently using advanced modular integrated shipbuilding technology in line with the best in the world.

With the adoption of new advanced technology and ‘Industry 4.0 practices’, The shipyard is on its way to becoming a global leader in warship construction.

 

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Why Bangladesh has been ignoring India’s warnings about the Chinese ‘debt trap’​

China’s Belt and Road Initiative has become almost synonymous with debt trap diplomacy. It’s a half-baked idea that created grounds for unfounded speculation.​

Adam Pitman

Many in South Asia view major foreign powers (like China) and changes in status quo (like new economic relationships) with caution.

A history of colonialism and non-alignment are shared experiences across the region. These experiences contribute to a principled worldview, which does not readily accept terms defined by realpolitik, and prefers to redefine issues based on precedent.

However, smaller countries in the region – like Bangladesh – have shown greater willingness to adapt to new trade and investment flows. India, meanwhile, has become more cautious.

These differing viewpoints are reflected in reporting on Chinese economic activity in South Asia.

Journalists in Bangladesh concerned themselves with the practicalities of China’s economic activity. Their work focused on events. They illustrated their stories with context.

Counterparts in India, and further abroad, expressed broader concerns about China’s economic activity. Their work focused on relationships. They illustrated their stories with perspectives.

This reflects a larger schism between fact- and opinion-based reporting.

It represents a distinct challenge for foreign news reporting and analysis, which often depends on third-hand accounts, collected in the days after spot reporting, or later when any debate has boiled over.

Unsustainable loans​

Invariably, journalists who would like to present “both sides” of China’s economic activity in event-based stories, and commentators who would like to express their distrust of China’s intentions in opinionated stories, refer to debt trap diplomacy, or utilise its narrative logic.

The dept trap diplomacy theory was created in 2017 by Brahma Chellaney, a strategist at the Centre for Policy Research. He created the theory to describe risks he associated with China’s Belt and Road Initiative or BRI, a global development programme unveiled as “One Belt, One Road” in 2013.

Chellaney alleged that Beijing used the BRI to further China’s geopolitical interests.

Debt trap diplomacy lulled countries into unsustainable loans for infrastructure projects. This produced assets that Beijing could use for political leverage, and seize if borrowers could not afford repayment.


The debt trap concept provided a theoretical framework for critics of the BRI. It also seemed to explain motive in several high-profile deals involving Chinese state-owned enterprises – namely a 2011 land lease in Tajikistan and the 2017 Hambantota Port lease and equity sale in Sri Lanka.

The trouble for debt trap proponents is that China didn’t appear to cancel debt as part of the deals. Borrowers still owned their debt, and assets.

Tajikistan’s land lease was designed to commercialise agricultural development. Sri Lanka used the income from the port lease and equity investment for repayments unrelated to the port, or China.

More recently, the term has been used to describe Laos’ 2020 power grid lease and equity sale to a Chinese state-owned enterprise. But reporting hasn’t shown that China cancelled debt as part of the deal. Some analysts expect Laos to use the income for revenue-generating power exports.

These cases don’t serve as textbook asset seizures – the supposed goal of debt traps.

Scant evidence​

The How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments study – co-published by AidData, the Center for Global Development, the Kiel Institute for the World Economy, and the Peterson Institute for International Economics – found scant evidence of debt traps.

Specifically, the study’s authors found “little evidence […] that China’s state-owned banks routinely use physical infrastructure – like a seaport or a power plant – as collateral” in their review of 100 contracts between Chinese lenders and government borrowers in 24 countries across the world.

However, the study did find contracts contained aggressive clauses. These clauses had more in common with commercial lending terms than terms offered by bilateral or multilateral lenders.

The authors noted that, while all creditors seek influence for repayment, commercial terms take on new meaning when used in government-to-government lending. Especially if Chinese lenders were to leverage their contracts over a borrower during a debt crisis.

These findings show that states who borrow more than they can afford may find themselves in a tight spot with China. Still, research to date hasn’t uncovered enough case examples.


Instead, research to date has shown that BRI outcomes are largely defined by borrowing governments, and their ability to manage projects, lenders, and contractors.

Like How China Lends authors, the Rhodium Group, an economic research firm, didn’t find any clear-cut asset seizures in a review of 130 bilateral debt renegotiations involving China between 2000 and 2020.

The firm’s previous research found bilateral debt renegotiations with China “usually involve a more balanced outcome between lender and borrower, ranging from extensions of loan terms and repayment deadlines to explicit refinancing, or partial or even total debt forgiveness”.

Further, they found renegotiations often favoured the borrower, rather than China, particularly when borrowers had alternative sources of funding, or experienced a change in political leadership.

Taken together, the research suggests that China’s contracts may reflect its insecurities, rather than “creditor imperialism” designed to support “neo-colonial designs”, as Chellaney alleged.

The country is, after all, a new overseas lender financing ambitious state-owned enterprises in high-risk locations.

Bumps in the road​

And the BRI is far from a runaway success.

Many projects have failed to materialise, while lenders have written-off others. State-owned enterprises have clammed up when they realised a project was poorly designed, or cost too much. Lenders, meanwhile, have little interest in playing rough – that would only create political problems for Beijing.

As Shahar Hameiri, associate professor at the University of Queensland, has written, a twist on Hanlon’s razor applies: “Never attribute to malice what can be explained by incompetence.”

But debt trap diplomacy allegations have persisted in spite of literature that has questioned its merit, from the BRI’s origins in China, to its application across the world. And the burden of proof has remained in the hands of its critics, rather than its claimants, on a country-by-country basis.

That means countries like Bangladesh are just one soft report away from their next debt trap drama.


Asian News International made the most specific debt trap allegation against Bangladesh in 2019. The news agency has been accused of publishing disinformation and propaganda, including on Bangladesh. But the article was syndicated by credible broadsheets and its allegations were later refined by commentators.

According to the ANI article, Bangladesh’s Payra port project could “fall into Chinese hands”.

The article was allegedly based on comments made by “officials in Dhaka”. The article suggested the officials said, “It will not be a long time before China starts asserting more control over the Payra port.”

The article further claimed the officials believed China’s investments were “a smokescreen to obfuscate their real intentions, which was [sic] to establish sovereign control over a crucial Bangladeshi port”.

The article correctly noted that two Chinese state-owned enterprises signed memoranda of understanding for project components. But it didn’t mention other firms were bidding on other components. Dhaka selected four other firms – one from Europe, and three from South Korea – to work on the project.

Dhaka had employed a model it often used for its infrastructure projects.

It divided port development “into 19 components, opting for separate funding strategies for each component that ranges from government-to-government cooperation to public private partnership”, according to Abdullah Ar Rafee, a researcher at the Institute for Policy, Advocacy, and Governance.

Bangladesh is financing dredging work. India is financing a terminal. Dhaka wants China and Japan to finance other components. Others may step up if tapped.

Well-placed sources in Dhaka would have been aware of these details. The fact that ANI’s sources were not aware suggests they weren’t well-placed to comment.

Unbridled speculation​

Either way, the Payra port allegation illustrates where debt trap proponents so often go wrong. Few examine how projects are designed, financed, or awarded before making an allegation. This is why projects involving China in any way are often mentioned as part of debt trap speculation.

The debt trap theory – one scholar called it a “meme” – has become a catch-all.

Proponents use the term to warn of a variety of risks they associate with infrastructure projects financed, or constructed, by China. Sometimes regardless of whether financing is unsustainable.

The way some commentators now describe debt traps could be misunderstood as ensnaring whole countries. They refer to a general vulnerability to a debt trap-like situation. They use information that implies Beijing compromises borrowers’ government or market to support their view.

This lay usage creates grounds for near-constant debt trap speculation in countries like Bangladesh. The sheer improbability of such allegations rarely attracts critical analysis. But it’s not beyond rebuttal.

Gowher Rizvi, foreign affairs advisor to the prime minister of Bangladesh, told The Indian Express, “our relationship with China is very much confined to investments and development projects. However, even then we have been very mindful. We do not want to create a situation where we have borrowed more than we can repay. We have learnt from Sri Lanka; we have learnt from Djibouti.”


Bangladesh is not a sitting duck. Multilateral creditors hold most of Bangladesh’s debt – not China.

Dr AK Abdul Momen, Bangladesh’s foreign minister, said, “Many critics argue that since Bangladesh has undertaken a large number of mega projects through borrowing from other countries, it may fall into debt trap, but it is not true.” He noted China held just 6.5% of the country’s external debt.

These comments speak to a more serious problem. Many borrowers simply don’t believe in the debt trap idea because it doesn’t reflect their experience. That’s because it presents borrowers as powerless.

The World Bank and Asian Development Bank are Bangladesh’s biggest creditors. These funders, among others, like Japan and the US, have been working in Bangladesh for decades. That experience has increased bureaucrats’ ability to select financing that serve their interests.

This may be part of the reason Bangladesh has managed it external debt so responsibly.

The International Monetary Fund reported Bangladesh had a “low risk of overall and external debt distress” before the Covid-19 slowdown and a “sustainable” debt profile afterwards.

In June 2020, Dhaka reported a 14.7% external debt-to-GDP ratio. Experts generally advise developing economies not to breach a 40% threshold.

‘Low risk’​

Several studies have confirmed that BRI financing was unlikely to cause Bangladesh debt distress.

In 2019, the World Bank found that Bangladesh wasn’t likely to experience BRI-related debt vulnerability. In 2018, the Center for Global Development described Bangladesh as having a “low risk” of debt distress, with a “small” risk from further BRI financing.

The authors of both reports used generous estimates for projected BRI investments.

Their data was based on open-source research due to the absence of official BRI data. For example, the World Bank estimated that Bangladesh was due US $32 billion in BRI investments. This figure was based on projects that were either planned, implemented, or completed between 2013 and 2018.

It is then possible that Bangladesh’s BRI debt vulnerability may now be even lower than assessed.

Much of what is publicly known about China’s investment in Bangladesh comes from MoU announcements. That means researchers are dependent on figures announced for projects in the planning phase – projects that haven’t been implemented or completed.

A majority of these MoUs were announced when China’s president Xi Jinping visited Dhaka in 2016.


The Daily Star, an English-language daily from Dhaka, recently reported that only seven of the 27 BRI MoUs announced in October 2016 have been implemented. China has disbursed $1.6 billion against the $5.4 billion planned for the seven projects.

These figures are well shy of the $24 billion initially projected.

Dhaka scrapped several projects. These include a highway and a coal plant. At least two rail projects appear set for the chopping block. They never implemented others.

Most recently, Dhaka asked Beijing to swap five projects from 2016 worth $5.26 billion – including the cancelled highway and coal projects – for five new projects worth $1.65 billion.

These development suggest the countries are unlikely to achieve the $24 billion announced in 2016, or more bullish figures floated since then. But the countries will likely continue to work together.

David Dollar, a senior fellow at Brookings, has explained that many developing countries – like Bangladesh – prefer Chinese financing for infrastructure projects. That is because Western donors primarily finance capacity building programmes, and private loans are too expensive.

Countries “rationally allocate China to do transport and power, the Western donors to do social sectors, and private bondholders to provide general, short-term budget finance,” according to Dollar.

Dhaka will then likely continue to seek out financing from China because Beijing’s financial interests are well suited to Bangladesh’s infrastructure needs.

But it won’t stop Dhaka from pursuing other opportunities.

In March, for example, Dhaka established the Bangladesh Infrastructure Development Fund. The fund will use foreign exchange reserves to invest $2 billion a year in port and power projects.

When analysts view these factors together, they may come to see the BRI commitments made between 2016 and 2020 as demonstrative. It announced the interest Beijing and Dhaka had in collaboration. Some of the projects they forged worked out, many did not.

What’s sure is that Dhaka isn’t beholden to Beijing. It is addressing infrastructure with purpose.

This is the third in a five-part series on the India-Bangladesh relationship. Read the rest of the series here.

Adam Pitman is an analyst and editor based in South Asia. His Twitter handle is @ar_pitman.

 
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