Published:  02:56 AM, 09 September 2019 Last Update: 02:58 AM, 09 September 2019

China's BRI 'debt trap' raises concerns

China's BRI 'debt trap' raises concerns Guests attending an international conference on the Belt and Road Initiative organized by the Centre for Policy Dialogue (CPD) at a hotel in Dhaka's Gulshan area on Sunday. -Jahidul Islam/AA

Experts at an international conference in Dhaka have spoken about their concerns over the "debt trap" of China's flagship belt and road initiative (BRI) in which Bangladesh has joined. Centre for Policy Dialogue (CPD) organized the conference on the Belt and Road Initiative of China at a city hotel yesterday.

Bangladesh will have to negotiate more on China's Belt and Road Initiative (BRI) to get maximum facilities from it, experts opined. 

According to the experts, China is investing in many sectors in Bangladesh. Many investors will invest here in future. So, Bangladesh needs to negotiate more about BRI to get maximum opportunities from China. They also emphasized negotiation with China on BRI as it is very important for economic ties of the two counties.

Fahmida Khatun, executive director of the Center for Policy Dialogue (CPD) that organised the conference on Sunday, said "debt should be managed well and debt sustainability issue should be closely monitored in order to avoid any possible debt traps".

Prof Sachin Chaturvedi, director general of India's Research and Information System for Developing Countries (RIS), also shared the "inherent flaws of and concerns" about the BRI which he saw as an "alternative development cooperation" model.

But he said, in practice countries "often fail to negotiate a good contract that respects their own development priorities and get trapped in the undisclosed and opaque terms of engagement".

Chinese expert Prof Cheng Min of the Institute for Bangladesh Studies of the Yunnan Academy of Social Science, Kunming, however, said the BRI has provided "good conditions" for the establishment of the China-Bangladesh free trade area.

"On this basis, China and Bangladesh still need to make continuous efforts to take positive measures," she said. In the conference, Industries Minister Nurul Majid Humayun said there is a good relation between Bangladesh and China. Prime Minister Sheikh Hasina also visited the country recently.

He said, "BRI is very important for south Asian countries including Bangladesh. A developed economic relation will be established with China through BRI."

Senior Secretary of Foreign Ministry Md Shahidul Haque said BRI is very significant for Bangladesh's infrastructural development and trade.

He said, "We're in key position of the BRI belt. So, We've to negotiate about its opportunities."

CPD Chairman Professor Rehman Sobhan also spoke on the occasion. Former caretaker government advisor Syed Manzur Elahi presided over the function while Dr Fahmida Khatun, Executive Director of CPD, presented the keynote papers.

BRI was officially launched in September 2013 when Chinese President Xi used a speech at a university in Kazakhstan to call for the creation of a "Silk Road Economic Belt." The project was later expanded and re-branded with BRI.

The Belt and Road initiative has two main divisions: One is called the "Silk Road Economic Belt" (the belt) and the other the "21st Century Maritime Silk Road" (the road).

BRI regional connectivity for Bangladesh is focused on an extension of the BCIM (Bangladesh, China, India, Myanmar) economic corridor, or what began as the Kunming initiative, proposed by Professor Rehman Sobhan as far back as 1999.

During the visit of President Xi Jinping to Bangladesh in 2016, a number of MoUs and agreements were signed between Bangladesh and China. Under BRI, Bangladesh will receive $26 billion USD for BRI and an additional $14 billion USD for joint venture projects, all of it going up to a total of a $40 billion USD package. But, only 1 billion of the promised amount has been disbursed so far.

Of the 27 agreements on development, collaboration, and financial assistance/loans, highlights included Karnaphuli Multi-Lane Tunnel project in Chittagong, the Confucius Institute at Dhaka University, and the Tier-4 National Data Centre in Gazipur's Kaliakoir, Shahjalal Fertiliser Company Limited in Fenchuganj, a 1320 megawatt thermal power plant in Patuakhali's Payra and a 1320 MW coal-fired power plant in Chittagong's Banshkhali.

Bangladesh is now an emerging economy not to be ignored by the world. GDP is currently over 8 percent and per capita income has risen to $1,970 USD from $637 in 2009. The social indicators are a matter of envy for governments around the globe.

And yet Bangladesh needs to exercise caution, given that China's Belt and Road Initiative has been causing much, indeed grave, concerns around the globe. Beijing's BRI plan has by now created a good deal of problems for nations which have come within its purview.

The encouraging part of the BRI story is that India and Bangladesh have remained outside the BRI, which throws up the hope that all may not yet have been lost.

Even so, the diplomacy practiced by Bangladesh in relation to BRI appears to have led to a situation where Beijing may indeed succeed in influencing Dhaka into being part of the BRI process. It is a circumstance Bangladesh's government will need to be on guard against in the interest of its economy, its politics and its foreign policy.

Bangladesh is a strategic maritime nation and occupies a critical access position with regard to the Bay of Bengal and the Indian Ocean. It is, therefore, natural to assume that a major segment of the BRI project will or could pass through Bangladesh, unless of course the government takes strategic steps to ensure that it remains free of the process. One of the six economic corridors of BRI will pass through Bangladesh.

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