The Belt and Road Initiative (BRI) by China provides opportunity for Bangladesh to improve its infrastructure, increase investment, trade and enhance connectivity with countries in South Asia, but it also raises concerns of debt trap and environmental damage, said experts yesterday.
To reap benefits from the BRI, Bangladesh should engage in conversations with China to negotiate terms of loans and other issues, fix priority in selection of projects, ensure transparency and accountability as well as focus on ensuring governance related to the BRI schemes, they said.
They were addressing an international conference on the BRI and interests of Bangladesh organised by the Centre for Policy Dialogue (CPD) at Gardenia Grand Hall in Dhaka, which was attended by current and former diplomats, economists and experts from China, India and Nepal.
“For Bangladesh, BRI provides an opportunity to seize benefits, particularly in areas of trade, investment, connectivity, education and tourism, through strong ties with countries particularly in the Southern Asia region, more specially, with China and India,” said CPD Executive Director Fahmida Khatun in a keynote presentation.
Launched by Chinese President Xi Jinping in 2013, the BRI initiative, also known as the New Silk Road, aims to connect Asia with Africa and Europe via land and maritime networks through infrastructure and other connectivity related investments.
The BRI aims to build connectivity and cooperation across six economic corridors: New Eurasia Land Bridge, China-Mongolia-Russia economic corridor, China-Central Asia-West Asia Economic corridor, China Indochina Peninsula Economic corridor, China Pakistan corridor and Bangladesh-China-India-Myanmar (BCIM) economic corridor, she said.
China plans to rebuild the land network connecting China to Europe via Central Asia and the maritime route from China to Southeast Asia, South Asia, the Middle East and Eastern Africa, Khatun said.
By the end of July 2019, 136 countries and 30 international organisations signed cooperation document in this regard.
The BRI spans across the territories of 72 countries, which covered 66.09 percent of world population and 33.65 percent of global GDP as of 2018.
The initiative has generated a lot of discussion and speculation across the world and China has established a Silk Road Fund with $40 billion.
Large Chinese banks have also become engaged in financing BRI projects in other countries.
Bangladesh is connected with the BRI initiative through the BCIM economic corridor that covers 1.65 square kilometres and includes 440 million people.
It connects China’s Yunan province with Bangladesh, Myanmar and India through road, rail, water and air linkages, according to Khatun.
The Kunming–Kolkata corridor can reduce the costs of transport and benefit Bangladesh through enhanced trade and investment.
Bangladesh has become a part of the BCIM and China promised to provide $40 billion investment in Bangladesh in bilateral assistance for infrastructure projects and joint ventures.
Until now, the largest proportion of the BRI projects have been taken in the energy and transport sectors, she said.
“Thus, BRI effectively and efficiently fills in the infrastructure gaps in Bangladesh.”
But sustainable financing of the BRI projects in the participating countries is an important issue.
“This is the most important issue. In many countries, Chinese loans have become questionable,” Khatun added.
China will need to structure its terms for financing of its BRI projects so that recipients can sustain the debt and repay it through enhancement in their production base and its diversification, said CPD Chairman Rehman Sobhan.
The BRI is indeed a global initiative to construct a new international order based on enhancing development and ending poverty across the South within the framework of a more equitable world order.
Sobhan suggested that countries such as Bangladesh engage in dialogue with China and open up a much broader conversation on issues related to industry, infrastructure and research initiatives on various issues.
“In the end, the BRI initiative is with individual country.”
The BRI looks at south-south cooperation (cooperation among developing countries) and integration but so far the BRI initiatives by China are bilateral and it needs to open up broader conversation.
“In the absence of any collective move to construct a new order China will have to work out the specifics of its more comprehensive vision on a bilateral basis,” he said, adding that work on identifying project priorities would be important.
Sobhan also suggested Chinese and Indian think-tanks to come together to assess the concerns of the Indian government, which have so far kept them out of the BRI process.
The BRI initiatives are viewed as development initiatives as the participating countries are benefiting from investments made by China in infrastructure projects, said Sachin Chaturvedi, professor and director general of the Research and Information System for Developing Countries (RIS), New Delhi.
But partner countries often bring in issues like transparency in the projects, environmental concerns, non-employment of local labour in construction and operations and other works, he said, citing some projects in Myanmar, Thailand, Sri Lanka and Lao PDR.
He, however, said when such mega projects are launched issues are likely to come up.
“And the BRI is evolving as China has undertaken several mechanisms such as debt sustainability programme,” he said, adding that China should initiate the BRI in a framework that reconciles with other global initiatives.
Industries Minister Nurul Majid Mahmud Humayun stressed on ensuring a win-win situation with China and others when dealing with the BRI issues.
Bangladesh Ambassador-Designate to China Mahbub Uz Zaman suggested being mindful of cost overruns and the interest rate of loans taken under the BRI projects.
“The BRI is good but it has to be BRI plus Europe,” said Syed Manzur Elahi, member of board of trustees of the CPD.
At the end of the day, Bangladesh needs developed markets to sell its products to, he added.
In another session on economics of the BRI, Asif Ibrahim, executive council member of ESCAP Sustainable Business Network (ESBN), said joint ventures and technology transfer are important for Bangladesh.
The BRI projects should be developed in a way that factories remain in close proximity to those. “I would like to see more exports going to China through BRI initiative,” he said.
At the session, CPD Distinguished Fellow Mustafizur Rahman said governance of the BRI projects has become important.
Sun Xiqin, editor of South and Southeast Asian Studies Journal, Yunnan Academy of Social Sciences, Kunming, China, said no country would fall into a debt trap because of cooperation from China.