Regional powers like China and India have offered multi-billion dollars of loan to Bangladesh due to their growing interests on the country, economists said on Friday.
They said Bangladesh is located at a very strategic position in South Asia where both the countries are in a race to assert their control. As a result, they focused on Bangladesh pertaining various political and economic policies.
“China and India have immense geo-political and geo-economic interests in the South Asian region. Bangladesh is very important for them due to its strategic location, physical proximity and proximity to the Bay of Bengal,” Dr Ahsan H Mansur, an economist, told The New Nation yesterday.
He said China fervently needs the cooperation of Bangladesh to assert more control over Indian Ocean and Malacca straits and implement its “One Belt One Road” initiative. For India, Bangladesh is a strategic country to tighten its grip in South Asia.
“Bangladesh needs tens of billions of dollars for developing its infrastructure. So, loans from India can help mitigate its massive funding needs,” said Dr Mansur.
Bangladesh on Wednesday signed a new concessional line of credit (LoC) deal of US$4.5 billion (approximately Tk 36,000 crore) with India for implementation its priority projects. This brings India’s resource allocation for Bangladesh to more than US$8 billion over the past six years.
“We see nothing wrong to take Indian loan. But, the government agencies must ensure quality procurement and fast project implementation under the Indian line of credit,” said Dr Mansur who works at the Policy Research Institute Bangladesh as Executive Director.
He also said timely implementation of projects is very vital to make the projects viable and competitive.
“India has already signed several LoC deals with Bangladesh, but a contentious Teesta water-sharing deal remained elusive. Even, India does not boldly stands besides Bangladesh to solve the Rohingya crisis,” Dr Mansur said, adding, “India must address common concern of Bangladesh for deepening Dhaka and New Delhi ties further.”
He observed China is providing commercial credit to Bangladesh under a number of mega projects. Such credit may put Bangladesh into a debt trap. “Bangladesh should aware of this and pursue the Chinese authorities for concessional credit,” he added.
When asked, Dr Mansur said, their (China-India) relation with Bangladesh is more strategic than moral. If their friendship was established with ethical values they may boldly stand beside Bangladesh on Rohingya issue and strike Teesta water-sharing deal.
Bangladesh signed $25 billion loan deal with China for nearly 30 development projects during President Xi Jinping’s visit to Bangladesh in last October.
“India and China is competing themselves for establishing their influence in the South Asian region. They earlier provided loans to Nepal, Sri Lanka, Bhutan and Pakistan and now giving it to Bangladesh as part of their policy to tighten their grips in the region,” Dr Khandoker Ibrahim Khaled, a former deputy governor of Bangladesh Bank, told The New Nation on Friday.
He, however, said their loans have created an opportunity for Bangladesh to develop its infrastructure and mega projects.
“Bangladesh has potential to become a regional economic corridor connecting SAARC and ASEAN states. So, China and India are now moving towards Bangladesh due to their political and economic interests,” said Dr Ibrahim Khaled.
“Their (China and India) interest is growing on Bangladesh because it has become a big market for their products and services. The huge population of Bangladesh and their rising disposable income has forced them to expand their business further,” Dr Zahid Hussain, an economist, told The New Nation yesterday.
He also said China wants to relocate their ‘Sun Set’ industries to Bangladesh due to cheap labour and quality work.
“Apart from the trade and investment, China and India are giving importance to Bangladesh for developing regional connectivity. Bangladesh with its unique geopolitical position between China and India can gain a lot if it can sensibly handle their influence and properly utilize their loans,” Dr Zahid Hussain added.
