Shinzo Abe’s visit to Bangladesh: An Assessment

by Barrister Harun ur Rashid | September 9, 2014 5:32 am

The visit of the Japanese Prime Minister to Bangladesh has been a fruitful one for his country. Japan got what it wanted because it will be elected uncontested for a seat from the Asia-Pacific region to a non-permanent seat of the UN Security Council for 2016-17 after Bangladesh withdrew its candidacy from the region. The election will take place at the session of the UN General Assembly in 2015.

Japan’s deep history of rivalry and conflict with China is well known. The country once prided itself as the second largest economy of the world but China has overtaken Japan, putting it into a third place. The people of Japan never liked that China overtook them as the world’s second largest economy.

Abe wants to play a high-profile global role and the Security Council is the best forum for Japan to achieve for next two years. Furthermore Japan supports the US’s policy to contain China’s influence and power in the Asia Pacific region and Japan is likely to use the Council to this end.

The Security Council is the “cabinet” of the UN to maintain international peace and security. The admission of a new member starts from the recommendations of the Council. . The sanctions imposed upon any country are decided by the Council. Any matter relating to international peace and security gets immediate attention of the Council.

At the end of talks between the two Prime Ministers of Bangladesh and Japan , a joint communiqué was issued. It consists of 25 paragraphs emphasizing deepening bilateral relations on political, economic, cultural, and peace and security issues. Time will tell whether the goals as enumerated inn the communique will be fulfilled..

Bangladesh had expected that the Japanese Prime Minister would commit additional funds in exchange for withdrawal of its candidacy for Japan and this did not occur. That means Bangladesh’s withdrawal from the candidacy is unconditional and may be considered as “investment” for future cooperation with Japan. Bangladesh’s decision to withdraw its candidacy from the Security Council has been a prudent and pragmatic diplomatic step for Bangladesh…

BIG-B Concept:

Japan has floated an innovative concept of Bay of Bengal Industrial Growth Belt. It is a regional concept and involves Bangladesh, India and Myanmar for economic growth.. Bangladesh is very important for Japan because of its location between India and South East Asia. Bangladesh’s neighbour, India has a market of 1.3 billion people which is a key to Japan

He referred to the $6 billion loan promise he made to Bangladesh for the next four to five years including this year’s $1.2 billion during Bangladesh Prime Minister Hasina’s visit in May and said that all these loans were under Japan’s BIG-B concept.

Indian Ocean is important for Japan. Japan has a grand design of combining the two oceanic regions- Pacific Ocean and Indian Ocean- for more geo-political space to boost its economy. The largest Bay in the world, Bay of Bengal, forms the north-eastern part of the Indian Ocean and Bangladesh is located in the north in the Bay.

In his “Monsoon” (2010) , US author Robert D. Kaplan argues that” we need fresh ways of seeing the world, Kaplan’s goal is to provide his countrymen with just such a map, one centered on what he calls “the Greater Indian Ocean.” Most important of all, it is in the Indian Ocean that the interests and influence of India, China and the United States are beginning to overlap and intersect. It is here, Kaplan says, that the 21st century’s “global power dynamics will be revealed.”

Abe mentioned three dimensions of the BIG-B concept. One is to promote infrastructure improvement for industrial development, second is to create better environment for investments and last to promote improved “solidarity and unitedness” in the region including Bangladesh.

Specifically, Abe said improvement of transportation, infrastructure, stable supply of power and energy, urban development including special economic zone improvement and also public sector development including market access to financial market were the key to the BIG-B concept. He also highlighted Matarbari power generation project near the port city of Chittagong as one of the “flagship” cooperation between the two countries.

According to JAICA, the Matarbari Coal-Fired Power Project has two key components, a deep sea port 18m in depth for importing coal and a coal-fired power plant with an electricity generation capacity of 1,200MW. That is equivalent to 15% of current electricity demand. The deep sea port will enable 80,000 ton class ships (panamax size) to directly enter the port for coal unloading. Its construction is expected to be completed in 2020.

The coal-fired power plant should start commercial operation in 2022, or perhaps even earlier. It will be equipped with state-of-the-art Ultra Super Critical technologies, the manufacturing and operation of which Japan leads the world. The USC technologies to be used in the Matarbari plant will ensure stellar thermal efficiency (45%) and drive down its toxic emissions to 10 times below the prevailing levels of these emissions in the USA and France, respective.

The Government of Bangladesh and JICA are currently undertaking discussions to conduct a comprehensive master plan of the area including Chittagong and Cox’s Bazar. This will further materialize the shape of BIG-B. The total cost would be about $10 billion to implement the BIG-B concept

Creation of investor-friendly environment in Bangladesh:

By promoting investments, Abe said “voices of Japanese investors should be heard in making investment friendly environment” Japanese business leaders (50) who accompanied the Prime Minister Abe to Bangladesh demanded easing of investment rules so as to invest in Bangladesh. Kuniharu Nakamura, CEO of Sumitomo Corporation reportedly stated: “ We want to expand business but we need policy support from the government.”

What Bangladesh needs is to create investment facilities in the country. The Japanese companies want efficient, speedy and workable “one stop service”. This means all relevant government agencies-BOI, Bangladesh, Bank, BEPZA, and BEZA are easily accessible to them at one place. In addition, good governance, an independent judiciary, and investor-friendly laws are requisites for sound business climate and the absence of these would shy the investors away.

Some of the searching questions that Japanese investors would like to ask before they decide their capital to flow to Bangladesh which are as follows.

For instance, is the country politically stable? How skilled is human capital? Has it good roads and transport system? Are the ports working at their best? Has it introduced sound macroeconomic policy for investment? Will the policies be intact with the change of a government? How long does it take to operate a business? Statistics show that in Singapore it takes only five to eight days to start off a business with a telephone, while it takes at least 35 days, if not longer, in Bangladesh. Recently CPD added a few factors such as corruption and restrictive labour regulations as barriers to investment.

It appears that the importance of human factor in modern production is very important and skilled labour with knowledge of English language attracts foreign companies in the country.

Japanese Prime Minister mentioned about the comprehensive partnership with Bangladesh. He said that businessmen of both sides were very important players to achieve the partnership. Cooperation toward attaining global peace and stability, economic cooperation towards the promotion of mutual interest and regional prosperity and promotion of cultural and people-to-people exchanges were the three highlights of the partnership.

Finally, private sector-led investment and cooperation is the fundamental bottom line of Japan. Japanese companies are ready to invest and it is up to Bangladesh authorities to meet the Japanese investor’s expectations. Bangladesh must not fail to seize this great opportunity to build a comprehensive economic partnership with Japan which will help the country reach on a higher economic growth and prosperity.

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