A reminder for New Delhi: India is no longer the guardian of Bangladesh
Indian firms are not well positioned to compete with Chinese firms – and other developed countries – for tenders in Bangladesh Syed Zakir Hossain / Dhaka Tribune
According to Adam Pitman, China and India have often failed to recognize that Bangladesh has a range of economic partners, which limits the relevance of the zero-sum thought experiment.
A new generation of Bangladeshis defines their country. They came of age during the Shahbagh protests in 2013. They began to work amid unprecedented growth. Now they are exposing their values.
This generation represents a third of the population.
Women entering the workforce seek equality and empowerment. Graduates find jobs at aid agencies and tech companies. Start-ups create new market opportunities.
Dhaka fights for trade and investment from all over the world.
It is rare to open a newspaper in Bangladesh and not find articles on the future of the country. Yet these stories rarely leave the country. And when they do, they are rephrased as esoteric questions about the country’s development or foreign relations – often from an indocentric point of view.
Increasingly, however, efforts to reorient Bangladesh have turned out to be disconnected. And he’s reached an inflection point. India no longer has to do with the Bangladesh she once knew.
This became very clear when commentators began to view Bangladesh’s relations with China as a problem for India. Their rhetoric called into question Dhaka’s decision-making and the loyalty of the Bangladeshis. But more than anything, it showed that many cannot rationalize the country that Bangladesh has become.
The media information cycle started a little over a year ago.
On April 17, 2020, India announced restrictions on investment from China. A little over two weeks later, on May 5, the first border clashes took place between Chinese and Indian troops.
China’s existential threat had become tangible to many in India.
The Rashtriya Swayamsevak Sangh was ready for the front. Protesters burned effigies. Resident welfare associations boycotted products made in China. The Delhi Defense Colony has declared war. This marked an intensification of anti-Chinese sentiment that has surfaced in the wake of the Covid-19 outbreak.
The Indian media quickly pulled Bangladesh into the fray.
A trade concession from China became a sign that Bangladesh was moving away from India. The symbolism of diplomatic events legitimized fears that China would surround India. Old news about China’s trade, investment and contracts with Bangladesh has resurfaced as threats to India.
None of the speculations were founded. But that clouded the water enough.
Global editors ran headlines that ranged from sophomoric (“Two-timing – As Bangladesh’s relations with India weaken, ties with China deepen”) to suspect (“China and Pakistan may they profit while Bangladesh turns away from India? ”) influence cools Bangladesh-India relations”).
Some journalists have engaged in circular reporting. They repeated claims made by others without scrutiny. Others interviewed experts who described the media echo chamber as a geopolitical competition. They amalgamated public discourse with real events.
Commentators had a day in the field.
What Beijing’s relationship with Dhaka meant for New Delhi had been an open question for years. But the matter has taken on new urgency in light of the military crisis in Ladakh. Whether Beijing would use trade and investment to influence Dhaka for strategic purposes has become a focal point.
“Debt Trap Diplomacy”
Few of them explained how this could be achieved. Those who have tried have referred to the theory of debt trap diplomacy, either explicitly or implicitly. The theory has clouded thought in Bangladesh for years.
According to this theory, Beijing convinced Dhaka to sign loans that Bangladesh could not afford. Beijing would then use its loans to influence decision-making in Dhaka, or even seize infrastructure.
It seems far-fetched in simple English. But that’s what debt trap diplomacy means.
The term is most often used as a dog whistle by experts or officials interviewed by journalists. It is still difficult to justify. Journalists end up describing projected investment figures or large-scale infrastructure projects, lending credence to the narrative logic of the theory.
This creates a false balance between speculation and research which has debunked the theory. There can be many good reasons to be concerned about China. But debt trap diplomacy is not. Not to mention Bangladesh, where Dhaka has, of course, not borrowed more than it can afford.
It is not clear why so many people have bought into this false narrative.
Did New Delhi take a page from American spoiler Steve Bannon and “flood the area with shit?” It may have attracted those who believed Beijing had bought a strategic advantage from Dhaka.
The simplest explanation, however, is that stakeholders were going through a moment of weakness. Struggling with the loss of ground in Ladakh, it was easy to imagine the loss of face in Bangladesh.
Indian Neighborhood First and Act East policies are vague. China’s Belt and Road Initiative is not. China’s perceived influence in Bangladesh has given India a renewed sense of purpose.
This has evolved into an “imaginary competition” for gossip classes, according to Smruti S Pattanaik, a researcher at the Institute for Defense Studies and Analyzes.
They were shadowboxing.
China and India were predominant in this construction. He failed to recognize that Bangladesh has a range of economic partners, limiting the relevance of the zero-sum thought experiment.
Bangladesh gets most of its imports from China and India, but this is offset by exports to the European Union and the United States. China is a major investor in Bangladesh. But it held only 5.5% of Bangladesh’s foreign direct investment stock in 2020, far less than several other countries, as well as Bangladesh’s largest investor, the United States, which held a share of 20.9. %.
Beijing and New Delhi are neither. But the fallacy also distorts thinking in other ways.
When China’s “gain” in Bangladesh is seen as a “loss” for India, policymakers in New Delhi may confuse Beijing’s interests with theirs. Concerns over the number of Chinese companies building infrastructure in Bangladesh are a case in point.
Many believe that projects that showcase the rise of Bangladesh should get more engagement from Indian companies. This interest, however, is not one that the private sector can satisfy. For tenders in Bangladesh, Indian companies are not well placed to compete with companies from China and other developed countries.
This reflects a disconnect between the role India can play and the role many want it to play.
When decision-makers attempt to fill gaps like this with pride, it can lead to self-transcendence. This is what happened a decade ago in Africa, where China’s growing market share prompted the Indian government and private sector to find a jugaad. It ended in corruption, fraud and failure.
There is good news for Indians and Bangladeshis, however.
The speculative comments did not undermine efforts to integrate the economies of Bangladesh and India. These efforts are far more promising than any competition between China and India.
If countries implement the Motor Vehicle Agreement and sign a free trade agreement, Bangladesh’s exports to India will increase by 297% and India’s exports to Bangladesh by at least 172 %.
This trade will raise income levels and lower consumer prices for Bangladeshis and Indians. The recent rail and maritime agreements should also promote a similar chain effect.
There is nothing to smell. These efforts lay the foundation for more lucrative trade deals.
The two neighboring countries are members of the Bay of Bengal Initiative for multisectoral technical and economic cooperation. The group of seven countries want to conclude a free trade agreement.
This free trade agreement would increase trade by 500% between BIMSTEC member countries.
China provides nothing more than background noise for the dialogue on these opportunities. But politicians will need to show more force to prioritize national interests over special interests.
Free trade has become taboo in New Delhi. The “Davos men” never sold “Indian history” to India. Politicians now advocate protectionism to achieve an “Atmanirbhar Bharat” or an autonomous India. Special interest groups do not care that the internal market is too small to generate strong growth on its own.
Dhaka embraced its country’s export-led growth. But he also showed a lack of enthusiasm for the reforms needed for agreements with the largest exporting markets. It’s a shame. These reforms could address the concerns of multinationals responding to consumers who want ethical supply chains.
These political concerns do not last long, however.
And the promise of connectivity and commerce will remain undeniable. This is an opportunity that entrepreneurs will probably not let go of. Politicians could do a lot worse than show up in front of the parade.
Adam Pitman is an analyst and writer based in South Asia.
This is the first in a five-part series on the India-Bangladesh relationship that has been first published in Scroll.in. It is republished under a special arrangement with Dhaka Tribune.