Great Power Competition: Bangladesh may remain a key battleground

Bangladesh will likely remain a key battleground for great power competition in the coming years, given its unique locational position and recent geopolitical trends, including the rise of India and growing Sino-US tensions in the South China Sea, according to a new study.

"From Dhaka's vantage point, growing competition between China and the US in the Indo-Pacific region only offers more opportunities for improving economic growth," according to the study titled "The Belt and Road Reboot" conducted by Aiddata, a research lab of the US-based public university William and Mary.

It says the US, as a defender of liberal democracies around the world, may feel compelled to condemn actions that would push Bangladesh further down the path of authoritarianism. On the other hand, it cannot ignore the realpolitik consideration that China's influence is expanding in South and Southeast Asia.

The study released on Monday used Bangladesh, Zambia and Argentina as case studies. It assessed China's global flagship programme Belt and Road Initiative (BRI).

According to Aiddata, China remains the world's single largest official source of international development finance, with its aid and credit commitments to low- and middle-income countries now hovering around $80 billion a year. Washington is beginning to close the spending gap with Beijing, now providing approximately $60 billion of development finance annually.

The report says between March 1971 and 2008, Bangladesh's largest foreign aid and credit providers were Japan, the US, and the UK, but Beijing issued grant and loan commitments worth $17.5 billion, making it Dhaka's single largest development partner since the BRI was launched in 2013. The projects were largely focused on power plants, transmission lines, highways, and bridges.

"Since December 2008, the centralisation of political power has resulted in higher levels of administrative certainty and created an enabling environment for Beijing to bankroll and build big-ticket infrastructure projects," the study says.

It says previous research has demonstrated that elections provide powerful incentives for politicians to showcase their performance, and highly visible physical infrastructure projects are ideal for achieving this goal.

"Her [Prime Minister Sheikh Hasina] critics argue that, under her watch, Bangladesh's economic progress has become solely reliant on nepotistic textile industrialists, and her team is out of fresh ideas to tackle deep rooted structural problems, such as corruption.

"Irrespective of these challenges, with major opposition parties in disarray and dissenting voices in civil society largely silent, today she is predicted to win the January 2024 election," the study said.

Although growing competition between the US and China in the Indo-Pacific region offers more opportunities for economic growth, Bangladesh economy needs diversification through new competitive industries adjacent to its dominant textile industry, says Aiddata.

This will require investment, skills transfer, and further integration of existing industries into global supply chains, said the report, adding that deepening trade relationship with China, potentially through the planned rail link via Myanmar, could increase economic prosperity through job creation.

From the US perspective, its robust trade ties with Bangladesh and strong alliance with India may provide opportunities to make inroads, says the study.

"Yet recent events, including vote rigging, voter intimidation, the use of violence, and the targeting of Nobel Peace Prize laureate Muhammad Yunus through the judicial system, have put Washington in a tough position," said Aiddata.