Feature Img

8456717800_07aafae27d_zPerceptions matter as much as objective realities in global politics and economy. Bangladesh has taken giant strides in many areas of social and human development, drawing praise from the likes of Nobel laureate Amartya Sen, but the decision to fund the $2.9-billion Padma Multipurpose Bridge with its ‘own resources’ has finally sent out a message loud and clear to the world that the 42-year-old nation has arrived.

Prime Minister Sheikh Hasina has obviously taken a great risk by withdrawing the request for the World Bank funding and deciding to do the project with the country’s ‘own resources’. But the spin-off from the decision clearly outweighs the risks for three clear reasons.

First and foremost, it sends a clear message to the world that Bangladesh now has the economic fundamentals to handle what is clearly its biggest infrastructure project so far. This propels Bangladesh into the league of ‘breakout nations’ and draws attention to its economy that can help attract foreign investments on a larger scale.

Secondly, it is a great boost to the national spirit because no other South Asian leader, perhaps not even the Indian Prime Minister, would have mustered the courage to ask the World Bank to pack off from such a huge project.

This is not to suggest that the World Bank is not right in raising the issue of corruption in the Padma bridge project. But the global lender has overlooked such issues across the globe and its insistence on the corruption issue in Bangladesh was beginning to smack of ulterior motives after the government had ordered investigations. The surge in national spirit that is likely to increase once work visibly starts on the project may help the ruling alliance in an election year, buttressing the spin-off from the war crimes trials.

It helps Bangladesh maintain the crucial balance in the regional politics. If she had turned to China in desperation to implement the project – Finance Minister Muhith had described the Chinese proposal as ‘most attractive’, she would have risked upsetting India, which is obsessed with the growing Chinese footprint in South Asia, which Delhi often believes, is its own backyard. Now with the implementation of the Land Boundary Agreement not yet through and the Teesta water sharing deals not yet signed, Bangladesh has to keep India in good humour because these agreements have electoral ramifications and without getting them through, Sheikh Hasina could face the inevitable question back home of getting nothing in return after doing so much for India.

The Chinese had proposed to mobilize $1.95 billion for the project, complete it within three years without changing the bridge’s existing design and offered an easy payback for 20 years. The only issue that would have made Bangladesh slightly uncomfortable is the Chinese track record of using its own labour for implementing such prestigious projects abroad. Bangladesh itself is an exporter of labour and its working class surely looks forward to such huge projects as the 6.15-km bridge on the Padma for livelihood as the project comes up.

After asking the World Bank to pack off from the project, Finance Minister Muhith had initially said Bangladesh was looking up to three options – China, India and Malaysia. The Indians, weighed down by a resource crunch, could only offer $200 million from the existing $1 billion line of credit signed in 2010. The Chinese and the Malaysians came up with their proposals quick enough.

This was a useful exercise for Bangladesh because (a) it could check out on these options and weigh them against doing the project with its own resources, (b) send a signal to the World Bank and the West that ‘Asian options’ were available even if the BRICS bank does not take off immediately, and (c) remind others who take Bangladesh for granted to avoid doing so anymore.

Muhith has now announced allocating $68.52 million for the Padma bridge in the upcoming national budget. This translates to $0.88 billion at current exchange rates, roughly a shade less than one-third of the project cost. Even the proposal by the Chinese consortium had suggested Bangladesh would have to mobilise roughly 30 percent of the project cost from its side.

This means the present government is mobilising the kind of financial resources for the project, which it would have had to in any case, while also retaining the ‘foreign options’ even as it weighs floating bonds that Bangladeshi expats and other moneyed people back home may readily invest in with all the national fervour accompanying the start of the project.

Besides, ever increasing remittances ($14 billion in 2012), looking up forex levels, growing export incomes and reduced import costs leading to a fall in trade deficit are some of the positive indicators of Bangladesh economy that would help Muhith and Hasina take the plunge in undertaking this massive project with the country’s own resources.

Most importantly, it sends a message back to Pakistan – that Bangabandhu’s decision to break away in 1971 was right and that Bangladesh, despite its vast multitude of problems, would finally overcome them and prosper, while Pakistan, because of its religion-driven political ideology, military-dominated power structure, over-reliance on foreign assistance and blind hatred to India, would sink into the abyss – a victim of its own contradictions.

Every nation needs a defining moment in its history to tell the world it has arrived.

For India, it was 1971, not just because it crushed Pakistan’s army and helped Bangladesh win its freedom, but mostly because it achieved self-sufficiency in food production through the Green Revolution and finally declined the US food aid through PL-480. That did much to prove the prophets of doom like Selig Harrison and Neville Maxwell wrong about India and helped convince her own people of a great future.

Bangladesh was born in 1971 and has been through many ups and downs due to ceaseless efforts by vested interests to undo its march towards progress. But 2013 would go down as the year when South Asia’s youngest nation—perhaps its strongest in organic terms—finally stood up to prove Kissinger — and should we say, his successors — totally wrong.

The West often under-estimates the power of local nationalisms in the developing world, nationalisms powered by culture and language, and tend to believe, especially in Muslim-dominated countries, that religion is the biggest driving force of politics and society. They made this mistake in the Arab world and kept repeating it, but they better avoid it in Bangladesh. Washington does not have to send American marines to fight Islamic terror. There are enough home-grown secular forces in countries like Bangladesh who can fight that battle more successfully.

Syed Bashir is a bdnews24.com columnist

6 Responses to “Bangladesh comes of age”

  1. zahir sadeque

    Hilarious to say the least. A while ago another columnist in the same site wrote another misleading piece titled “Bangladesh Snubs World Bank”. BDnews24, despite its otherwise noble function will be forever known for its mindless psychophancy and kow towing of present government’s blunderous decisions. Earlier this site also flamed anti Yunus propaganda.

    Any sane person let alone an economist will throw this sentimental piece to where it belongs. Bangladesh as a LDC member country needs and deserves IDA concessionary loan more than world bank needs to disburse its fund in Bangladesh (and the country has a existing loan portfolio of over 4 billion from WB). IDA loan almost always attracts other donors and there are plenty of examples including Jamuna Bridge in Bangladesh. By choosing self-financing we’ll miss that and our patriotic government will serve the interest of wealthy foreigners and may be NRBs by paying out at least $165 million in 3 years as interest alone. Whereas by choosing IDA and other loans under the earlier arrangement Bangladesh would have paid virtually no interest and far less than the borrowed amount as in 40+10 years time inflation etc. would have lowered the real value of our debt servicing. And still the author heaps praise on this plan who knows for whose interest.

  2. Sixth Sense

    Prime Minister has not taken any risk.She has simply chosen a face saving way to salvage herself and all her men from the Padma Bridge debacle at the cost of the tax payers,majority of whom are to struggle relentlessly to survive honestly in this country.And that is the reality.Just wait and see.

  3. Zahid

    Thank you for the article – it lifted my mood today…this shows our potential as a young nation and where we can go from here…the best thing is yet to come..

  4. Golam Arshad

    Syed Bashir: Sweet words animates! Reality differs! Peace! Prosperity and Progress is now under “THREAT”. Prime Minister Sheikh Hasina, chosen the path of “Outright Confrontation” and the country is fast reeling under onslought of violence and commotion.

  5. Bangladeshi in Canada

    Only in Bangladesh! There is always spin for a bad situation. Corruption is in every level. Finance Minister urges to provide more loan to a bogus company! Following this writer’s logic, Bangladesh should get out of all development project funded by International Agencies to probe that Bangladesh comes of age. Honestly, this country is running because of people working abroad sending their remittance. If that dries up, the country will be back into a disaster!

  6. Tarin

    A well articulated article highlighting the rising importance and power of non Japan Asian fund lenders as opposed to World Bank, IMF etc. A very good lesson for Bangladesh. Lets hope that the country takes proper advantage of this situation.

Comments are closed.