Having burnt its bridges with India and fallen foul of the U.S. administration under President Donald Trump, the Interim Government in Bangladesh headed by Mohammed Yunus is now trying to get cosy with Pakistan and curry favour with China.
The effort of Dhaka to replace India with Pakistan and China as the growth partners of Bangladesh is, however, destined to fail.
Fomenting anti-India sentiments, student groups in Bangladesh backed by fundamentalist Islamic forces toppled the Awami League government. The bonhomie between New Delhi and Dhaka is now a thing of the past.
This is going to cost Dhaka dear as India is today the largest development partner of Bangladesh. In the last eight years, India has extended four lines of credit to Bangladesh, amounting to about $8 billion, for the development of roads, railways, shipping and ports. India has also provided grant assistance to Bangladesh in the infrastructure sector.
To step up relations with Islamabad, the Interim Government has allowed a range of concessions to Pakistan. The security clearance required for Pakistanis applying for Bangladeshi visa has been removed. Communal leaders of Jamaat-e Islami and Islamic fundamentalist criminals are reaching Bangladesh unhindered. Direct trade between Bangladesh and Pakistan has resumed for the first time since 1971.
Cargo from Pakistan can now land in ports in Bangladesh without scrutiny, allowing for the possible entry of consignments of arms and ammunition. Pakistan is taking full advantage of the situation.
In January, Islamabad sent a team of senior officers of the Inter Service Intelligence (ISI), the notorious intelligence wing of the Pakistani army that functions as a spy agency, led by an officer of the rank of Major General.
They were taken to Rangpur in north Bangladesh, close to India’s strategically sensitive Siliguri corridor, known as the ‘Chicken’s neck;’ and also to the Chittagong Hill Tract which had earlier been used as the springboard by terrorist groups to create disturbances in north-east India.
The ISI is at its old game of helping underground insurgent groups to try and destabilise the north-east region of India. But the strategy which the ISI used effectively in the 1980s and 1990s is not going to work now. The ground situation in the north-east region has changed. The government of India, through negotiations, has been able to successfully reduce the footprint of insurgency in the region over the past decade.
After the introduction of the Look East Policy and the Act East Policy, the north-east region is witnessing rapid economic development. There have been major improvements in infrastructure, like roads and railways. A modern semiconductor unit is going to be inaugurated in Assam within a year’s time. A cement factory will also come up. People of the north-east are no longer willing to support insurgency or secession and the efforts of the ISI to create trouble will be in vain.
The move of the Donald Trump government in the U.S. to freeze all foreign aid to Bangladesh has put Dhaka into more trouble. Left with no option, the Interim Government is wooing China, the ‘all-weather friend’ of Pakistan.
Mohammed Yunus himself is scheduled to head to Beijing later this month. As part of the initial cuts and freezes, the White House has immediately ended or suspended any project the United States had been supporting in Bangladesh.
U.S. agencies had pumped in billions of dollars into sectors like healthcare, education and disaster preparedness in Bangladesh. With the infrastructure and state institutions in Bangladesh in a state of collapse since the overthrow of the Sheikh Hasina government, the drying up of U.S. assistance has caused serious concern in Dhaka regarding developmental projects in Bangladesh that may come to a halt.
The Mohammed Yunus government has now approached China for assistance. A large delegation from Bangladesh comprising members of political parties, student leaders, scholars and journalists, and including Adviser Foreign Affairs of the Interim Government Touhid Hossain, has just concluded a 10-day visit to China.
The Chinese Communist Party did not have any qualms about entertaining members of Jamaat-e-Islami and other hard line Islamic parties as part of the delegation. Chinese assistance under the Belt and Road Initiative will, however, push Bangladesh deeper into a debt trap.
The pending Chinese loans under Belt and Road Initiative projects incurred during the Sheikh Hasina government now amount to nearly $6 billion, which is around nine percent of the total debt of Bangladesh.
Beijing has not agreed to write off any past Chinese debt. The request of Dhaka to extend the period of loan repayment of Bangladesh and to reduce the rate of interest has not evoked much enthusiastic response from Beijing either. Any reduction in interest rates in the area of Preferential Buyer’s Credit and Government Concessional Loan is not going to be of much help to Dhaka. Preferential Buyer’s Credit ultimately serves the interest of China; advanced to fund imports of Chinese products.
Only a small part of BRI projects are funded by Government Concessional Loans. BRI projects are mostly funded by commercial loans against high interest rates. Neither Pakistan nor China can substitute India in the pivotal role it plays in the growth and development of the country. Pakistan cannot replace India as a trade partner. Bangladesh is India’s next-door neighbour and the biggest trading partner.
The value of Bangladesh-India trade is 15 times the value of Pakistan – Bangladesh trade. The total trade turnover between India and Bangladesh touched the $13 billion mark in 2023-24. All the measures the Interim Government in Bangladesh has taken to step up trade with Pakistan notwithstanding, the trade turnover between Bangladesh and Pakistan is yet to reach the $1 billion mark. Pakistan does not have the resources to provide economic benefits like India.
The trade turnover between China and Bangladesh was $23 billion in 2023, but this figure was for formal trading. If the value of informal trading between India and Bangladesh, facilitated by the 4,000-km long largely unguarded border, is taken into account, the volume of trade between India and Bangladesh will be way ahead of that between China and Bangladesh. Trade and commerce apart, cultural and people-to-people ties between India and Bangladesh are too strong to be replaced by Dhaka stepping up its relation with Islamabad and Beijing. One instance is the plight of patients in Bangladesh who are in need of advanced medical care.
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After souring relations with India, Bangladeshi patients are now avoiding hospitals in the Indian city of Kolkata for treatment. Dhaka has now sought the facility for the treatment of Bangladeshi patients in Kunming in China. But Kunming is far away from Dhaka, while Kolkata is its next-door neighbour.
