BANGLADESH GETTING MASSIVE FOREIGN INVESTMENTS
By Ashis Biswas
One interesting aspect of the BIMSTEC grouping is that smaller member countries set the pace in terms of attracting foreign investments as well as implementing the agenda of regional development. Until recently, Myanmar in the first flush of its post-dictatorship democratic dawn, was a magnet for international investors because of its enormous mineral and energy resources. Lack of infrastructure and political complexities have taken some of the shine off the Myanmar development story.
But the LookEast story continues not just for India, but for more advanced countries as well. The focus of international finance still remains firmly on India’s East at a time of global recession. What has occurred is a change of location: major countries of the world are making a beeline to help Bangladesh grow economically.
The Economist has reported recently that China has promised a $40 billion investment in 21 specific projects involving the construction of expressways, railways, bridges and power stations in Bangladesh. Russia, despite facing Western economic sanctions, will help with an aid package of $11.2 billion, seeking to set up two nuclear power stations at Rooppur. Japan is not far behind, promising $ 6.7 billion to be spent on setting up a terminal to liquefy natural gas and 4 coal-based power plants. Then comes India with a $4.2 billion aid package of its own to launch two more coal-based power plants, along with helping railway and seaport projects.
Kolkata-based analysts wonder whether even India, the biggest member in BIMSTEC, has succeeded in attracting specific project-based foreign investments on the same scale as Bangladesh. Relative to size even Gujarat or Maharashtra, both much more industrialised than Bangladesh, have not received similar assistance.
In 2014, Chinese President XI Jinping promised a $22 billion investment for mostly Gujarat-based projects. But China went slow on follow-up and implementation, as India opposed its ambitious ‘One belt,one road’ infrastructure initiative(OBOR) and dragged its feet on the regional BCIM economic corridor(Bangladesh, China, India and Myanmar).
Any comparison between Bangladesh with neighbouring West Bengal is also pointless. West Bengal attracted industrial investments to the tune of Rs 300 crore only during one year in recent times, exceeded even by Assam which received over Rs 1000 crore ! This was an all time low. And in 2016, with Trinamool Congress leader Mamata Banerjee crowing about her ‘glorious success’ in having returned farm land to the peasants in Singur big ticket industrial investments are yet to take place.
Says one economist, ’It is particularly galling that while it’s raining dollars in Bangladesh, the clock is moving backwards in the supposedly more advanced Bengal. The once derided rustic country cousins in the East are having a jolly laugh at the expense of their snootier brothers in the West !’
It needs pointing out that Ms Banerjee has so far visited the UK, Germany and Singapore with ‘specialised” trade delegations (including singers and artistes!) , in search of investments. Result? So far, not ONE industry or new project has been announced. She now plans to visit Thailand ( where the weather is said to be good this time of the year) with another ‘delegation’ soon.
Contrast this with Bangladesh, where Mr. Narendra Modi, Mr.John Kerry and Mr, Jinping have visited Dhaka in recent times, not to mention other leaders. Investment has come to Bangladesh without its leaders having to go round the world begging for funds. The first question of West Bengal’s Ministers after learning of the new Asian Infrastructure Investment bank (AIIB) from Chinese diplomats was,’ Do you have credit facilities for states in India ?’ This at a time when Bengal’s outstanding debts to the centre are about to cross the Rs 300,000 crore mark!
One can only wonder what Mosley and Kissinger would say today about the progress made by Bangladesh in recent years. The country is second only to China in producing garments, and has over 8 million of its citizens working aboard. In terms of remittances, Bangladesh competes with bigger nations like Pakistan and India. Before 1970, West Pakistanis did not allow their fellow citizens in the East to get too many passports.
Despite its relative backwardness, its rickshaws, poverty and congestion, global warming threatening its survival as a country, there is a new vitality among its 160 million population. By 2025 or so the country expects to reach middle income status. Its annual rate of GDP growth is between 6 and 7%. It is ahead even of India in the implementation of some of its millennium goals, let alone the failed state of Pakistan. In infant mortality, women empowerment and spread of literacy, it is second to Sri Lanka in South Asia.
A sure sign that foreign investors are confident about investing in Bangladesh, despite its law and order problems and long spells of political deadlock, is that organizations like the World Bank, the Asian Development Bank and the International Monetary Fund are keener than before to participate in the ongoing and future projects. The WB’s interest in financing the new big bridge on the Padma river is a recent example, but finding certain conditions unacceptable, Dhaka did not hesitate to reject the bank’s offered help!
Economists welcome the Bangladeshi growth story because they feel in time it could help galvanise the stagnant economy in Bengal and East India as a whole. ‘There would have been little development in Gujarat unless Maharashtra and Karnataka were also developing. Bihar and Orissa economies were driven by West Bengal’s early industrialisation. Similarly, an economic take-off in Bangladesh might just help kickstart the economic regeneration of East and Northeast India,’ says an analyst. (IPA Service)