Bangladesh PM Sheikh Hasina’s recent visit to China has been described as a classic act of balancing ties with India and other major powers. Hasina visited Delhi twice in June this year. The visit to Beijing soon after signals Bangladesh’s resolve to pursue its interests with both China and India. But Hasina’s Beijing trip was abruptly cut short, allegedly due to the ill-health of her daughter; it is unclear if this was also because of some disagreement with China or the fierce job quota agitation back home.
China and India are Bangladesh’s biggest economic partners. By wooing Bangladesh, China seeks to expand its influence in the subcontinent to counter India’s influence. China’s maximum investment has been in Pakistan, where the two nations have found policy congruence to constrain India’s options while building infrastructure and investing in a strategic port like Gwadar. This port on the Makran coast, not far from Chabahar in Iran, is gradually being expanded to include an industrial zone and a naval base for China.
Hasina’s Beijing visit focused on bolstering bilateral economic ties. She met President Xi Jinping briefly, but her main interlocutor was PM Li Qiang. The two witnessed the signing of 28 agreements, mainly on trade and investment. It was decided to expedite the ‘Joint Feasibility Study on China-Bangladesh Free Trade Agreement’ and commence negotiation on the ‘Optimisation of China-Bangladesh Bilateral Investment Treaty’.
The chairman of the National Committee of the Chinese People’s Political Consultative Conference, Wang Huning, and Hasina released a joint statement claiming “extensive consensus” on regional and international issues. The two sides agreed to abide by the Panchsheel principles, which has made a return in Chinese diplo-speak after decades, signalling some nuancing in China’s diplomacy in the region.
Bangladesh needs funds for infrastructure, energy and better technologies for its growing economy. It has signed up to China’s Belt and Road Initiative, like all other neighbours of India except Bhutan. The two sides have announced bilateral ties raised to “a comprehensive strategic-cooperative partnership” from a “strategic partnership”. This could mean cooperation in long-term projects across new sectors.
China’s BRI investment in Bangladesh has not matched up to a grandiose announcement of $40 billion. From 2009 to 2019, it was around $9 billion in transport, infrastructure and energy. Hasina has sought more investment at a time when Bangladesh’s economy is under stress from higher energy and food prices. It has seen a significant erosion in forex reserves to $20 billion from a high of around $45 billion.
Bangladesh hopes to get Chinese help in the defence sector and funding for building ports, railways, power plants and bridges. But there is no free lunch in geopolitics and China will demand strategic favours from Bangladesh, which may impinge on India’s security. China already has an overwhelming influence on Bangladesh’s armed forces, which depend on Chinese military hardware to the extent of around 75 percent.
BRI projects can succeed if the loan terms match up to sustainable financing norms. Bangladesh is second on the list of countries in terms of BRI funding. While Pakistan is floundering economically, Bangladesh has been more prudent while accepting Chinese loans. Bangladesh’s debt to nominal GDP ratio is a manageable 23 percent. It has spread its debt between China, Japan, India and Russia and is the least likely to fall into a debt trap.
The Rohingya refugees is the main geopolitical issue on which Hasina sought China’s support. Undeniably, the Rohingya refugees, numbering over a million, are a huge economic burden, mitigated to an extent by assistance by several countries including India and China. The domestic situation in Myanmar has deteriorated sharply, with the junta rapidly losing ground to rebels. China earlier brokered an unsuccessful agreement for the return of Rohingya refugees living in Bangladesh for over 6 years. China may have promised help because it gets leverage but it is unlikely to convince the Tatmadaw (Myanmar military) that has lost control of almost half the country to the rebels.
While Hasina was in China, a composite Bangladesh delegation was in India to explore transhipment possibilities of cargo from and to Bangladesh using Indian ports at Chennai, Krishnapatnam, Visakhapatnam, Kolkata and Haldia.
Meanwhile, media reports suggested Hasina’s request for a one-to-one meeting with Xi did not materialise. Nor did Chinese Foreign Minister Wang Yi call on her as expected. Bangladesh’s request for $5 billion in direct assistance was not accepted and only around $130 million was promised. This could be due to China’s decision to downsize commitments, as a result of its own economic slowdown.
Dhaka’s economic worries became global news with the current students’ agitation against quotas for government jobs for the progeny of freedom fighters, minorities and tribal communities. This agitation has claimed more than a hundred lives in clashes between the police and the Chhatra League, the students’ wing of the ruling Awami League. The agitators set fire to the state television building. All educational institutions have been shut. The Indian High Commission in Dhaka has advised Indian citizens to stay indoors.
Hasina’s caustic comments on ‘razakars’, a deeply pejorative word in the country used for traitors who collaborated with the Pakistani army in 1971, fuelled anger among students who felt insulted. As the agitation spread, internet access was blocked. The army and border guards are on high alert. Sporadic calls for Hasina to step down indicate that the political opposition, comprising the Bangladesh Nationalist Party and Islamists, have infiltrated the student protestors. There are no prizes for guessing that foreign powers who do not like Hasina are also fuelling the agitation.
Agitators claim the quota system has denied government jobs to meritorious candidates and has been abused to favour people supportive of the ruling party. There is some merit in this argument. It is prevalent in India and some other countries as well.
As the global order changes, strategic balancing will become more challenging, given the country’s geopolitical situation and domestic politics. Bangladesh can be expected to maintain its foreign policy of neutrality, focus on ways to boost its economy and balance its strategic interests with all major powers. But the current domestic agitation, if not curbed quickly, may spiral out of control.
Pinak Ranjan Chakravarty
Former High Commissioner to Bangladesh, Visiting Fellow at ORF and a founding Director of DeepStrat, a think tank
(Views are personal)