Bangladesh needs to be cautious with China loans: experts
July 6th, 2020 at 1:13 pm
“We must think first from whom we are taking such financial assistance and if the donor country stops half-way and starts bargaining for other purposes that is not beneficial or against national interest for the receiving country what will happen then,”
Bangladesh needs to be cautious with China loans: experts

Nadeem Qadir:

Bangladesh needs to be cautious in its ties with China, especially on seeking funds for new projects as the Asian giant might have far-reaching plans with which Dhaka might not agree when put on the table, analysts here warned.

After India, China took over as Bangladesh’s largest trading partner and both the Asian giants have used investment in building infrastructure in Bangladesh as a way of gaining influence in the region.

What drew the attention of international affairs experts in Bangladesh is due to Dhaka’s recent request to Beijing for 11.5 billion dollars for 17 major infrastructure projects (The Financial Express, Dhaka) amid high tension between China and India over Ladakh.

At least 20 Indian soldiers were killed in the attack, which media reports blamed on Beijing and it has not revealed of any casualties on its side.

The reports by the media including the BBC said China continued to build structures in the disputed territory.

Looking at China’s “Death Trap” aid in Sri Lanka and several African countries and its stand against the ruling Awami League since 1971 and consistently backing Khaleda Zia’s Bangladesh Nationalist Party (BNP) until the 2014 general elections, they told newsnextbd.com that the Beijing did not raise a finger in solving the Rohingya crisis, a huge financial burden for Bangladesh.

“Twenty Indian soldiers are murdered in a surprise cross-border attack by the People’s Liberation Army. A Philippine fishing boat is sunk in its own territorial waters by increasingly predatory Chinese ships. Peaceful pro-democracy demonstrators in Hong Kong are beaten bloody by riot police on Beijing’s orders. Australia’s farmers and miners are hit with trade sanctions Canberra suggests that the virus, which came out of China, may have come from…China,” wrote Steven W. Mosher in his article “The world is finally uniting against China’s bully tactics” in the 04 July 20 edition of the New York Post.

Ruhul Amin, head of Dhaka University’s International Relations, was of the opinion that the fact for leaning towards an eager China as India does not have the ability to finance such mega projects. China has its interest in funding this South Asian nation.

Prime Minister Sheikh Hasina and Chinese President Xi Jinping shake hands after meeting in Beijing

“We must think first from whom we are taking such financial assistance and if the donor country stops half-way and starts bargaining for other purposes that is not beneficial or against national interest for the receiving country what will happen then,” he said.

Referring to China’s debt trap diplomacy, which is also called “Death Trap”, that caused sufferings to Sri Lanka and some African countries, he said “We must make sure it does not happen to us and make every point clear before going at any direction.”

Amin was categorical in saying that Bangladesh “should always calculate its ties based on who is its real good friend.”

Humayun Kabir, a former ambassador and now with the private think-tank Bangladesh Enterprise Institute, says why Dhaka was leaning towards China, despite its track record of being anti-Awami League of Prime Minister Sheikh Hasina until 2014 elections.

Bangladesh celebration
Bangladesh flag

“When a regime wants show it is developing the country it borrows regardless from whom it is asking from … unless such regimes can sustain the borrowings it will face the consequences,” he said.

He added “In such development oriented regimes coteries and beneficiaries direct the government, even it might be risky.”

The government, Kabir added must “ensure returns and go for sustainable loans … these agreements are not always transparent, thus great caution is required.”

Top tech entrepreneur and Director of the International Business Forum of Bangladesh (IBFB) M. Shoeb Chowdhury was against taking such risks with China, saying “I believe what China is doing in the region and elsewhere in the world is nothing but neo colonialism and we must remember its stand against Prime Minister Sheikh Hasina until the 2014 elections.”

“When China realised that Sheikh Hasina has a popular grip on power after the 2014 polls, they started to build strong ties with her government, but remember its closest ally Pakistan is in economic tatters,” he added.

Chowdhury alerted that the China is an autocratic country with no respect for democracy that Bangladesh cherishes and “we should not flatter it like slaves … we should uphold the spirit of our great Independence Movement from Pakistan, which was backed by China. It is Chinese weapons and bullets, used by the Pakistani army, that killed millions of Bengalis in the 1971 war.”

He said Bangladesh should remember its traditional friend India and uphold the ties as well as take caution in taking such huge loans for mega-projects.”

M. Shafiullah, retired diplomat and international affairs analyst, “China did not come forward to Bangladesh’s appeal in solving the Rohingya crisis for its own interest as Myanmar and Pakistan are its oldest friends in South Asia.”

“What happens if China stops half-way to bargain with Bangladesh for its own interest and thus we must be clear every what is in it for China and Bangladesh,” he said adding that “we must finish ongoing projects and then go for new ones as China is the only option with neighbouring lacking capacity to deliver the current regime.”

M. Shafiullah explained that “fear” remained due to “Debt Traps” created by China in the past.

Debt trap diplomacy is used to describe a type of diplomacy based on debt carried out in the bilateral relations between countries with an often alleged negative intent. It involves one creditor country intentionally extending excessive credit to another debtor country with the alleged intention of extracting economic or political concessions from the debtor country when it becomes unable to honour its debt obligations.

The conditions of the loans are often not made public, with the loaned money commonly used to pay contractors from the creditor country. Although the term applies to the lending practices of many countries, it is currently most commonly associated with the China. Recent use of bilateral agreements through China’s Belt and Road Initiative have furthered this association, especially in relation to commodity backed loans for developing nations.

Nadeem Qadir is a senior Bangladeshi journalist and a Dag Hammarskjöld fellow,- newsnextbd.com