Looking into the future of Asia

The Asian Infrastructure Investment Bank (AIIB), based in Beijing, has agreed to provide Bangladesh loans worth USD 60 million to address its gas supply deficit. The Asian Development Bank (ADB) is also a co-financier to the project and had already approved a USD 167 million loan back in November 2016, to Bangladesh, to boost its natural gas production and expand transmission infrastructure. 

In a press release, the AIIB said that the fund is meant to help Bangladesh's Natural Gas Infrastructure and Efficiency Improvement Project as gas shortages would "eventually impact Bangladesh's energy security and constrain the nation's economic growth". At a time when much has been made, both in terms of policy and rhetoric, of a potential gas crisis that may hit the country, it is very welcome news for Bangladesh, one would assume.

But the loan is also significant because of another reason — it marks the total amount of loan issued by the AIIB crossing the USD 2 billion threshold. Bangladesh has already been a recipient of some of that. Back in June 2016, the AIIB approved a loan worth USD 66 million or Tk. 517 crore for two power distribution projects to help improve transmission lines in the country.

Guided by Jin Liquan — with his extensive experience working for the World Bank (WB) and the ADB — as President, some of the first loans approved by the AIIB last year included a USD 216.5 million loan for a National Slum Upgrading Project in Indonesia, a USD 27.5 million loan for the Dushanabe-Uzbekist and Border Road Improvement Project in Tajikistan and a USD 100 million for the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan. Just last week, 13 new prospective members were approved to join the bank as well, bringing the total approved memberships to 70 states.

While the AIIB has been growing its influence, some fear the growing Chinese influence in the Asia-Pacific region with it. They are not completely wrong in the sense that China has actively been looking to increase its influence in the region. But the real reason why, is because China is trying to get other Asian and Euro Asian countries onboard its vision for the One Belt, One Road (OBOR) stretching across Eurasia. And a most important reason for the creation of the AIIB was to fund development projects that would help turn that vision into reality, as explained previously by the Russian and Chinese Presidents.

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"And when India considers Bangladesh to be such a close ally, should it not be pleased with the strides that it is making, rather than suspicious (at least regarding Bangladesh's intentions/ambitions)?

One of the countries that have been a little sceptical about all of this is India, where Prime Minister Hasina is scheduled to visit soon. It is no secret that India and China are vying to increase their respective influences in both their immediate neighbourhoods and region. With China increasingly investing in countries within India's close proximity, perhaps there is logic behind India's growing concerns. That, however, should not be the case.

And the onus is on Indian and Chinese diplomats and high level officials to sort out the issues that time and again make the other side feel uneasy. Not on other countries. That should be clear to both.

Asia is already suffering from a USD 26 trillion infrastructure gap according to a recent report titled "Meeting Asia's Infrastructure Needs" by the ADB. Take the example of Bangladesh, where public investment in infrastructure is equal to less than 2 percent of the country's gross domestic product (GDP) and the WB suggests raising it to 10 percent a year to attain the 7.5-8 percent GDP growth rate that the country is aiming for, to become a middle-income nation by 2021. 

So, when it comes to infrastructure development, every country in Asia should be open to investments from all channels, as long as it results in win-win outcomes. With such massive funding shortfalls, Bangladesh too needs all the foreign funds that it can get.

And when India considers Bangladesh to be such a close ally, should it not be pleased with the strides that it is making, rather than suspicious (at least regarding Bangladesh's intentions/ambitions)? As far as China's investment in Bangladesh is concerned, Manoj Joshi, a Distinguished Fellow at the Observer Researcher Foundation had this to say in the Eurasia Review, "China continues to swarm over us in South Asia. The latest sign of this has been the $24 billion aid, loans and investment commitments made by Xi Jinping during his visit to Bangladesh in 2016".

What this shows is that many still see India's interest to be in direct conflict with China's. And increased Chinese investment in Bangladesh as a sign of success for China alone, rather than one for Bangladesh too. But neither is true. As Mr. Joshi himself pointed out "A major problem in India's foreign policy is its illusion that it is somehow competing with China." But other than the reasons he pointed out, I would like to provide an alternate argument as to why that is.

That, again, is OBOR — the economic benefits of which, reaped by Eurasia and its individual countries are difficult to detail here (see Moving forward with BRICS and BIMSTEC, The Daily Star, October 26, 2016). Two points, however, should be mentioned. First, it is one of the biggest economic and developmental initiatives ever taken. Second, experts from all over the world and professions have already argued that it has the potential to 'reshape the globe and global trade'.

China has already indicated that it wants India to participate in the enterprise. But India's stance still remains unclear. Some analysts have, however, argued that after a poor year of diplomatic relations between the two countries in 2016 and given the Trump administration's unwillingness to continue on with the 'American Pivot to Asia' policy (in which India would play a major role in 'containing' China), "there is every indication" of India "looking for a reset" in relations with China (Way to get back on board, The Hindu, March 23).

That can only be good news for the rest of Asia and Bangladesh. For too long have internal bickering and mistrust held back the development and progress of Asia. Among its very few success stories are the rapid development strides made by both India and China. But even they are, as of yet, incomplete.

Through cooperation alone between these two regional powers and others, can these successes, as well as new ones, be achieved and cemented. Thus, Bangladesh's policy must include working with both, but also to try and encourage and instigate cooperation between the two. At the end of the day, however, it is up to these two regional powers to decide whether to seek win-win cooperation or to accidently stumble into some form of confrontation which can, in no way, benefit anyone looking for the betterment and benefit of the region as a whole.

The writer is a member of the Editorial team at The Daily Star.