Bangladesh needs to proactively engage the two economic powers – India and China – on trade and investment, said a leading economist on Wednesday.
Policy Research Institute (PRI) Executive Director Ahsan H Mansur also noted that both India and China have very little investments in Bangladesh, which needed to be changed.
“Both BCIM Initiative backed by China and BIMSTEC Initiative backed by India, can serve Bangladesh very well. Bangladesh needs to proactively engage the two economic powers,” said the economist.
Mansur made the remarks while presenting a paper on “Economic Development and Bangladesh Foreign Policy” at a seminar titled ‘Changing Global Dynamics: Bangladesh Foreign Policy’ organized Bangladesh Institute of International and Strategic Studies (BIISS) in the city.
The economist thinks the steady emergence of India as a regional power and its historical relationship with Bangladesh is also a positive development from economic point of view.
“But this relationship is also complicated by some areas of economic conflicts like sharing of river water and the simmering issue with Muslims in Assam,” he observed.
Dr Mansur said recent experience with the Rohingya crisis is something that Bangladesh must analyze more carefully in shaping our long-term agenda.
“The sad thing was that at the UN and other international forum, none of Bangladesh’s regional powers (India and China) stood by our side despite the fact that supporting the Rohingya issue was a very justified cause,” he said.
If the Rohingya issue remains unresolved and ignored by the international community, Bangladesh may have to face a ten times bigger problem with potential exodus from Assam, said the economist.
Dr Mansur who worked for the International Monetary Fund (IMF) in the past said Bangladesh’s location in the middle of the two economic powers – China and India – is a great opportunity.
He thinks India’s emerging position as a major regional economic power, and its strong strategic alliance with the USA and Japan is also going to make Bangladesh’s political and economic diplomacy much more challenging.
Dr Mansur said Bangladesh’s stated policy of friendship with all’, while still appropriate, may not be easy to manage given the expected growing rivalry between China and India (backed by the USA and Japan).
He said in this globalized world, Bangladesh’s future economic development will critically depend on how it manages its economic policy, supported by economic diplomacy.
Graduation to middle income country status must start with the opening up of Bangladesh economy to intensify domestic competition, much higher levels of foreign direct investment (FDI) inflows and strategic investors from regional countries including China, India and Japan.
“Without massive investment in all sectors of the economy, Bangladesh will be trapped in the Middle-Income Trap, like most middle-income countries. Its dream to become a high-income country by 2041 will remain unfulfilled,” he mentioned.
Dr Mansur thinks Bangladesh cannot remain one of the most closed economies and cannot remain one of the lowest recipients of FDI among developing Asian countries.
Bangladesh, according to the economist, cannot remain as a country of most unskilled workers, and it cannot remain virtually unconnected to its own region. “A container from Delhi must not go to Mumbai, then to Singapore, then to Chittagong, and finally to Dhaka. It should come to Dhaka in 24 hours.”
To policymakers and diplomats, he said graduation from LDC status and the emergence of China and India as major economic powers have offered Bangladesh many opportunities.
More opportunities, he thinks, will come in future and the current century has been rightly dubbed as the “Asian Century”.
“But Bangladesh has to take advantage of those opportunities at the right time – indecision and procrastination will not help us. We will be left behind,” Dr Mansur said.
For India, he said, “We have to play our economic cards carefully but surely. At the moment Bangladesh depends on India in all respects and India virtually has no major economic stake.”
“We have to give India the transshipment right, but in a regional connectivity context with access to Nepal, Bhutan, and China. We have to engage with major power producers to produce power In India, Nepal or Bhutan and sell the power to Bangladesh,” Dr Mansur said.
He said the inevitable emergence of China as the second economic super power is something that the world and Bangladesh has to recognize and align its political and economic diplomacy accordingly.
The economist said emergence of China as the potential largest economic power is already changing the global political and economic relationships. unb