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Bangladesh losing its geo-economic importance to Myanmar

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M Shahidul Islam

The Rohingya refugee crisis has exposed Bangladesh’s diplomatic weaknesses. No permanent member of the United Nations Security Council has strongly backed Dhaka to solve the refugee problem. China rendered its support to Myanmar at the UN so that the country does not face any immediate threat such as sanction. The United States’ intention to solve the Rohingya refugee problem is at best half-hearted, as has been reflected by the fact that the issue was not even mentioned in President Donald Trump’s speech at the UN General Assembly.

India, though it does not have a strong voice at the UN, rather backed Naypyidaw condemning the terrorism in Arakan, ignoring the flight of thousands of Rohingyas. Japan, another important Asian power, also supported Myanmar.

Why are so many influential regional powers backing Myanmar despite the fact that the country has grossly violated human rights in Rakhine State? What are their stakes in Myanmar? What makes Naypyidaw so influential compared to Dhaka?

Can economic factors explain this phenomenon? The Bangladesh economy, which is now about USD 221 billion, is at least three times bigger than Myanmar’s. Bangladesh is also in a better position when it comes to trade relations with almost all the major regional and global powers, including China and India. What then makes Myanmar so important to the regional powers?

Bangladesh’s trade and other economic advantages are apparently not enough to compete with Myanmar when it comes to the latter’s geography. There is no denying that Myanmar is better placed than Bangladesh in terms of geographic location as it lies at the intersection of Southeast Asia and South Asia. Bangladesh’s geography, however, is no less important either, at least as far as India and other smaller nations of South Asia are concerned. Given the size of its domestic market and its location, it is equally attractive to China.

However, the key difference between Naypyidaw and Dhaka is that the former has been successful in utilising its geography creating a competitive space for China and India, among others. Both Beijing and New Delhi are developing ports, including a deep-sea port, and Special Economic Zones (SEZ) in Rakhine. Bangladesh, on the other hand, has not utilised its geography strategically. In recent years, not only Myanmar, even the small island-country, Sri Lanka has developed sophisticated maritime infrastructures including a deep-sea port.

Pakistan has built one of Asia’s largest deep-sea ports in Gwadar, and it is currently developing a multi-billion-dollar SEZ with the help of China. India has at least 10 major sea ports and is currently building one in Kerala. Bangladesh is the only country in this part of the world that has failed to modernise its maritime infrastructure utilising the country’s thousand-year-old port city Chittagong, located at the heart of Bay of Bengal.

Beijing’s interest to develop a deep-sea port in Chittagong was successfully thwarted by some influential regional powers citing security concerns. They reasoned that China’s “string of pearls” strategy, which is associated with a series of ports and other maritime infrastructure build-up in the Indian Ocean, is a security threat. There were, however, proposals from the UAE and the Netherlands—both with experiences in port development—to build maritime infrastructure in Chittagong. But successive governments in Bangladesh have failed to capitalise on those opportunities leaving Chittagong impoverished, ultimately jeopardising the country’s core interest.

The cost of not having a deep-sea port is enormous. The existing infrastructure of Chittagong port had reached its limit long ago. The cost of cargo handling is much higher in the Chittagong port as mother vessels cannot dock at the port. A deep-sea port would not only help Bangladesh economy, it is also bound to reshape the economic geography of the region. Such an infrastructure is often followed by development of SEZs drawing large investment. However, surrendering to regional powers, the current government has adopted the second-best solution of developing limited-scale ports in Payra and Matarbari.

Not only in terms of maritime infrastructure, in the past few years one has observed the centre’s neglect of Chittagong. The city is in decline. Chittagong is lagging behind Dhaka. Per capita capital expenditure in Chittagong, critical for its long-term development, for instance, is barely USD 3 compared to Dhaka’s USD 11. Had the centre been serious in developing its port city, Bangladesh’s position in regional geo-politics would have been very different from what it is today.

What’s ahead for Bangladesh?

In the post-American South Asia, China and India have emerged as both economic partners and geo-political competitors. Rakhine, which is barely 150 km from the southern part of Bangladesh, is fast becoming an economic and geo-strategic hotspot of the Bay of Bengal. This offers both challenges and opportunities for Bangladesh.

If Bangladesh intends to be an influential economic and geo-political player in the Bay of Bengal, there is no alternative but to develop maritime infrastructure in Chittagong. The settlement of maritime boundaries with India and Myanmar is a big advantage in this regard. It is now high time for Bangladesh to develop a blue economy capitalising on the opportunities arising from China’s Maritime Silk Road and Japan’s Big-B (The Bay of Bengal Industrial Growth Belt) projects.

There should also be efforts to negotiate with New Delhi and Naypyidaw to link Chittagong with Kaladan Multi-Modal Transit Transport Project to assess ASEAN markets taking advantage of geographic proximity and economic complementarities. India is getting similar benefits connecting Northeast with its core utilising Bangladesh’s geography.

There should be diplomatic efforts to resolve security issues involving Rakhine and Southern Bangladesh looking beyond the issue of the refugee crisis. China, in particular, intends to see a stable Rakhine given its huge investment in Myanmar’s warm water. There are incentives for other powers to destabilise the region to arrest China’s interest in the Bay of Bengal.

Finally, there is a need for national consensus, in particular political consensus among major parties, on the country’s core national interests. Otherwise, all these opportunities will remain elusive. Unless Dhaka wakes up, Rakhine will forge ahead, becoming the most important geo-economic hot-spot, leaving Chittagong improvised, and making Bangladesh subservient to regional powers.

  • M Shahidul Islam (an economist)

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