Geopolitical rivals India and China are competing for the attention of Bangladesh, a populous and economically vibrant South Asian country. Bangladesh’s strategic significance arises from the fact that it is hemmed-in by regional power India in the West, North and East, the resource-rich but troubled Myanmar in the South East, and the Bay of Bengal in the South.
The conflicting geopolitical goals of India and China in Bangladesh posechallenges to the Bangladesh Prime Minister Sheikh Hasina. While India and China play a thinly veiled zero-sum gameover Bangladesh, Sheikh Hasinais trying to get the best bargain from both without alienating either.
This has been a challenging political and diplomatic task.So far, Sheikh Hasina has succeeded in performing the balancing act. But the scenario in Bangladesh and in its neighbourhood is changing.
Bangladesh is now facing economic problems due to various factors including a shortage of foreign exchange partly brought about by heavy borrowing for development and partly by the flight of capital engineered by corrupt elements with political clout.
Meanwhile, the India-China rivalry over Bangladesh has grown and Bangladesh is feeling the pressure brought about by the rivalry. Neither India nor China can be alienated as both are close development partners, and both are needed for Bangladesh’s security, independence and sovereignty.
Sheikh Hasina hopes to negotiate favourable terms with both India and China through back to back visits to New Delhi and Beijing. She took up relevant matters with India when she was on a State Visit to New Delhi on June 21 and 22. And she plans to take up matters with China during her State Visit from July 9 to 12.
India Visit
Signifying India’s historically close ties with Bangladesh, Sheikh Hasina said in New Delhi: “India is our major neighbour, trusted friend and regional partner. Bangladesh greatly values its relationship with India, which was born during our war of liberation in 1971.”
Earlier, speaking to the Dhaka daily Prothom Alo the Bangladesh Foreign Secretary Masud Bin Momensaid: “The relationship between Bangladesh and India has a historical context and a geographical location. I do not want to compare any other country with India in terms of relations.”
Geography and close economic links forged over decades neccessitate close relations withIndia. But the need for mega investments and speedy implementation of projects underscores the need to have cordial relations with China too.This calls for deft diplomacy. Sheikh Hasina has shown her abilities in this regard so far.
Trade and Investment
Bangladesh is India’s biggest trade partner in South Asia. India is Bangladesh’s second biggest trade partner in Asia. India is Bangladesh’s largest export destination in Asia, with about US$ 2 billion worth of Bangladeshi goods going to India in 2022-23. In 2022-23,the Indo-Bangla bilateral trade was valued at US$ 15.9 billion. India has invested over US$ 8 billion in Bangladesh.
China, on the other hand, has been Bangladesh’s largest trading partner for the last 13 years, with a bilateral goods trade reaching US$ 24 billion in 2023. In terms of investment, China’s FDI in Bangladesh had reached US$ 3.2 billion by 2023, making it the second-largest investor in Bangladesh.
With both India and China, there is a huge trade deficit, which needs to be narrowed as soon as possible.
India Visit
By going to India first Sheikh Hasina underscored the primacy that her regime has been giving to India. In 1970-71, Prime Minister Indira Gandhi had politically and militarily helped Sheikh Hasina’s father, Sheikh Mujibur Rahman, secure Bangladesh’s independence from Pakistan. Hasina is ever grateful to India for that seminal contribution.
In a very important development, the Indian Prime Minister Narendra Modi announced that India and Bangladesh will begin technical-level talks for the renewal of the 1996 Ganga waters treaty, which is critical for Bangladesh’s agriculture.
Modi went further and said that anIndian technical team will visit Bangladesh soon for the conservation and management of the Teesta River, in order to mitigate the ill-effects of the Indo-Bangla dispute over the sharing of the waters of the Teesta.
But the Indian offer puts Bangladesh in a cleft stick. India’s entry into the Teesta’s Water Management project would raise the hacklesin China, given the fact that there is already an US$ 1 billion Chinese offer to do the project. That offer was made in 2016.
To counter the Chinese offer, in May 2023 India offered to fund and participate in the project. This was reiterated by Indian PM Narendra Modi in his talks with Sheikh Hasina last week.
Now, one the one hand, Sheikh Hasina is pledged to address India’s concerns arising from China’s involvement in the project. But on the other, she has China’s sensitivities on the issue to contend with. This thorny issue is expected to come up in her meeting with Xi Jinping in Beijing next month.
India and Bangladesh signed MoUson digital and energy connectivity, a Comprehensive Economic Partnership Agreement (CEPA), joint defence production, cooperation in combating terrorism, fundamentalism and measures to tackle killings of alleged infiltrators on the India-Bangladesh border – all on matters of great importance.
Bangladesh to Join IPOI
Indian PM Modi also announced that Bangladesh has decided to join the Indo-Pacific Oceans Initiative (IPOI). The IPOI proposes cooperation in seven sectors: Maritime security; maritime ecology; maritime resources; capacity building and resource sharing; disaster risk reduction and management; science, technology and academic cooperation; trade, connectivity and maritime transport.
It is not known as to how the Chinese will react to Bangladesh’s joining the IPOI, as China considers such Indo-Pacific structures as an Indo-American ploy to contain China.
India and Bangladesh also signed an MoU on oceanographic research and capacity building. There was an MoU between Defence Services Staff College, Wellington and DSCSC Mirpur Bangladesh for cooperation in strategic and operational studies.
The Indian National Space Promotion and Authorisation Centre (IN-SPACE) and Department of Space, and the Ministry of Posts, Telecommunication and Information Technology, Bangladesh signed an MoU for collaboration on a Joint Small Satellite Project. An MoU on Rail Connectivity, critical for India’s security, was also included.
Bangladesh’s Problems
Sheikh Hasina’s visit to India took place at a time when Bangladesh is facing serious economic problems. There has been an alarming decline in foreign currency reserves. According to the Dhaka-based Bengali daily, Prothom Alo Bangladesh and China are likely to ink an agreement for a soft loan of US$ 7 billion during Sheikh Hasina’s July visit to China.The paper says that of the US$ 7 billion, US$ 5 billion will be a soft development loan and the rest will be for budget support. ‘
The Western media has been highlighting details of rampant corruption, money laundering and loot of public wealth by a section of the Bangladeshi elite, mostly linked to the ruling Awami League. Media reports quoting the World Bank say that nearly US$3.15 billion flows out of Bangladesh illegally every year through offshore accounts while the country smarts under a foreign exchange shortage.
Then, there are 1.20 million Rohingya refugees from Maynmar who have to be catered to.
As for political challenges, Hasina herself has warned about a Western attempt to carve out a “Christian State like East Timor” taking parts of Bangladesh, Myanmar and India. There is also a charge that some interested parties in the West are trying to whip up disaffection in Bangladesh using the Hasina regime’s human rights violations todictate terms to Bangladesh.
