The Awami League government in Bangladesh is reaching out to all its neighbors for foreign aid and investment. Along with its recent moves to court the Indian government to fund development projects in Bangladesh, Prime Minister Sheikh Hasina reportedly will be seeking $3 billion in assistance from China during her 5 day state visit to Beijing which is scheduled to begin on March 17th.
China is Bangladesh’s largest net import trading partner. According to the Bangladesh Bureau of Statistics in 2007-2008, Bangladesh imported 18% of its goods from China. Imports from India accounted for only 13% of the total goods imported. Moreover, though Bangladesh exports a fairly large share of its goods to India, Bangladesh hardly exports anything at all to China. As a result, in 2007-2008, the bilateral trade gap between Bangladesh and China rang in at a hefty $3.8 billion, a figure much larger than the bilateral trade deficit between Bangladesh and India.
Therefore in a push to reduce this huge imbalance, Bangladesh will allow greater Chinese investment and, therefore, involvement in Bangladesh’s domestic economy. This move complicates Bangladesh’s strategy to grow ever closer to its neighbor to the East and West: India. Because India and China are struggling to outwit each other–in some anthropomorphic sense–Bangladesh’s gamble only adds a new variable into this stochastic equation.
The move is ambitious and though it is formally derived to aid Bangladesh develop its infrastructure “including the seventh Bangladesh-China Friendship Bridge, setting up several power plants, constructing [the] Chittagong-Myanmar-Kunming highway and a Bangladesh-China exhibition centre in Dhaka” , India’s Prime Minister Manmohan Singh can’t be too pleased with Sheikh Hasina’s visit.
In the coming years, it’ll be worthwhile to chart whether Bangladesh seeks to indemnify itself from international financial pressures or whether it will seek to establish greater regional security and cooperation with its most immediately available neighbor.
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