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Ports and pragmatism

Monday, 06 July 2015 | 07:12
Even as India seeks to develop a deep-sea port at Sagar Island to take pressure off the Calcutta-Haldia port system, Bangladesh seems to be looking at two - not one - deep-sea ports to take the pressure off Chittagong. Over the last two years, media reports and official negotiations had indicated that Bangladesh was trying to develop a deep-sea port at Sonadia, and that the Chinese were keen to fund it. When Prime Minister Sheikh Hasina Wajed visited Japan last year, Tokyo expressed an interest to develop a deep-sea port in Bangladesh. Wajed welcomed the idea because the negotiations with the Chinese over the Sonadia proposal had run into some difficulty. Consequently, a final agreement could not be signed during Wajed's Beijing visit that followed her trip to Tokyo.

Without waiting to untangle the knots of Sonadia and getting sucked into geopolitical rivalries involving China on the one hand and India, the United States of America and Japan on the other, Wajed's government promptly started scouting for a new site. In February this year, the CEO of Bangladesh's Deep-Sea Port Cell, Shariful Ahsan, visited Matarbari to check its viability for a proposed deep-sea port. Matarbari is 25 kilometres from Sonadia. Both are in Cox's Bazar district, and lie close to Maheshkhali where the Japanese are funding a coal-fired 1,200 megawatt power project. The Japanese International Cooperation Agency has announced that it is going ahead with the Matarbari deep-sea port, and that construction will start in January 2016. The port will have a draft of 18 metres, perhaps more, and would be good enough to accommodate the huge cargo ships that Chittagong cannot take in.

But while global business media treated the news as the manifestation of the rivalry between Japan and China, and by implication one between the West and China , Bangladesh's planning ministry officials made it clear that was not the case. M.A. Mannan, the junior planning and finance minister, made it clear that Bangladesh has not given up on Sonadia. "We are looking at two ports off the Cox's Bazar coast, not one as has been reported," said Mannan. The deep-sea port at Matarbari will primarily be used for importing huge consignments of coal that are needed for the Maheshkhali thermal plant and the one at Rampal, near the Sundarbans, which India helped develop while the Sonadia port will be used for general shipments.

Bangladesh has not built a new sea port since it won independence from Pakistan. Its ports in Chittagong and Mongla were built during the British era. These ports, like the one in Calcutta, suffer poor draft and cannot take in large vessels. The need to transfer goods in lighter vessels from deep sea hikes port expenditure and has an impact on the costs of imports and on the competitiveness of Bangladesh's exports. With Bangladesh's annual GDP growth steady at 6 per cent over the last few years and exports increasing fast, it is about time the country went in for two deep-sea ports at one go. After the recent agreements with India that were signed during Narendra Modi's visit to Dhaka, it is now evident that Bangladesh's ports would have to take a substantial additional load - that of goods going from India's mainland to its remote Northeast. The agreement on coastal shipping will also mean that the flow of cargo between India and Bangladesh would increasingly switch from road or rail to shipping. All this will tax Bangladesh's ports in the years to come.

So in keeping with Wajed's strategy of treating both China and Japan as 'crucial development partners' and involving India as well, the Bangladesh government has now made the most of an Asian geopolitical and geo-economic competition. "Why should a poor country like Bangladesh get involved in these rivalries? Rather we should get the most out of them for our growth," stated a top Dhaka-based researcher, who is an adviser to the Bangladesh foreign ministry. That is pragmatism at its best and in keeping with Dhaka's foreign policy motto of "friendship towards all, enmity towards none". The finance minister, A.M.A. Muhith, provided some insights into Bangladesh's priorities when he said that the Chinese are not bidding for the Matarbari deep-sea port project after coming to know that the Japanese are in it. Muhith said that the Chinese are happy since their companies are handling huge projects, such as the 6.15 kilometre-long railroad bridge on the mighty Padma. But the truth is that the Chinese know that Sonadia is as much on the cards as is Matarbari. They need to resolve contentious issues and once that is done, the final deal may be signed. So instead of getting caught up in China-Japan rivalry, Bangladesh is looking at two ports - one to be developed by the Japanese and the other by the Chinese.

The message to India is that an old port like Chittagong cannot handle additional cargo when India starts using Bangladesh's ports for trans-shipment to the Northeast. So India will be as much interested as the Chinese or the Japanese to see Bangladesh develop two deep-sea ports because that will help India gain better access to the Northeast. India does not have the funds or the expertise to build modern ports for Bangladesh. Why should it object to Chinese funding since the Japanese are also coming? The line of credit provided by India will be used to develop multi-modal linkages to these new ports - roads and railways to make them operational. If two ports are located close to each other, it will cost less to develop multi-modal logistic networks. Since the line of credit entails 75 per cent purchase of goods or services from the donor country, the new ports will generate development that will bring business for Indian companies.

For the Chinese, Sonadia would mean an additional land-to-sea access besides the Kyaukpyu-Yunnan link in Myanmar. For the Japanese, Matarbari can be converted into a growth zone like Dawei that they have developed in neighbouring Myanmar. Thailand will also look at these deep-sea ports with some interest. So in Bangladesh's port development plans, there seems to be something for all the Asian powers.

The Hasina Wajed government is looking at massive infrastructure development to achieve its target of making Bangladesh a middle-income country by 2021 - the golden jubilee of Bangladesh's birth. Muhith insists that this will happen before January 2019, the year in which the next parliamentary polls are supposed to take place. The Padma bridge should be completed by then, he says, because that will add 1 per cent to Bangladesh's GDP growth. Massive power projects are on the anvil because industrialization without power is impossible. For Wajed and her Awami League, the only hope of staying in power by beating Bangladesh's usual anti-incumbency trend is to unleash huge development. That is why Wajed's development diplomacy looks at absorbing Asian power rivalries and turning them to her country's advantage.
Source: Telegraph India
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