China unveiled on September 11 a mega-project that will see Beijing fund Bangladesh’s (mostly non-existent) ICT infrastructure. Worth US$10 billion and set to span some 13 years, the project will see fiber-optic cable networks radiate throughout the nation, with organizations as diverse as unions, police stations and rural educational institutions expected to transition parts of their activities online.
Hopes are running high that China’s package will help achieve Dhaka’s “Vision 2021” of a “Digital Bangladesh”, the brainchild of Prime Minister Sheikh Hasina and her adviser on information and communications technology (ICT), Sajeeb Wazed. The plan is that the Internet will underpin progress in areas such as education, health and governance and push the country to middle-income status.
But while the investment sounds great on paper, we shouldn’t hold our breath that this particular announcement will usher in a brave new age. In reality, the money will more likely help China further its regional ambitions than actually bring Internet connectivity into the homes of the almost 100 million Bangladeshis currently lacking access.
That is not to say that Bangladesh is not well positioned to get online more widely and in more effective ways. Only last week, it was noted that the country’s GDP per person is now higher than Pakistan’s, highlighting the country’s massive untapped potential. But the country’s structural problems won’t disappear just by throwing money at officials in Dhaka.
For one thing, Bangladesh has the dubious honor of being behind even war-torn Afghanistan in the World Bank’s Ease of Doing Business Index. Corruption remains endemic. A 2015 report from the American Chamber of Commerce states: “Corruption is common in public procurement, tax and customs collection and regulatory authorities.” This is thought to do everything from shaving percentage points off gross domestic product in real terms to stymying progress by raising construction costs.
Bangladesh is also structurally unprepared for investments in the ICT sector because of a constrictive regulatory environment. Instead of encouraging broadband coverage, which would go a much longer way than Chinese money could, the government is deploying policies that will actually reduce third-generation wireless coverage and throttle plans to introduce 4G.
A new proposal would force mobile operators to stop sharing telecom towers among themselves or sell them to a set of specially created companies. Worse, competition is further undermined by the fact that the government seeks to limit the number of licensed tower companies.
So why is China wagering $10 billion if Bangladesh’s economy is truly stultified by corruption and inadequate legislation? The only way the investment makes sense is by taking a look at Bangladesh’s strategic position as a 150,000-square-kilometer enclave surrounded by India’s eastern provinces. With bilateral relations between New Delhi and Beijing fraying, China is wagering that it can bring Bangladesh into its fold with loans, some spit in a palm and a friendly handshake.
China isn’t alone. Because of that strategic position, Tokyo, New Delhi and Washington are also courting Bangladesh.
All have their own agendas: Japan, for example, sees the Bay of Bengal Industrial Growth Belt (BIG-B) as a cornerstone of its economic trajectory in Asia, and has offered Bangladesh all manner of sweeteners, including $5.9 billion in aid and promises to build major infrastructure such as the $1.18 billion coal-fired Matarbari Power Plant.
India too – as a fellow member of the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC), a sub-regional economic cooperation initiative – wields significant influence over Bangladesh.
To some extent, India has partnered with Japan to head off Beijing’s advances. The Japan International Cooperation Agency (JICA) is also providing 67 billion yen ($600 million) to fund Phase I of the North East Road Network Connectivity Improvement project, which will see two national highways in Mizoram and Meghalaya improved – linking not only the northeastern states of India with the rest of the country, but also linking India with Bangladesh, a project that complements the Indo-Pacific Economic Corridor and to some extent counters China’s “Silk Road” ambitions in the area.
Squeezed from multiple quarters, Bangladesh is in the tricky position of trying to manage these competing interests in a way that maximizes its own benefits. Unfortunately for Dhaka, this may be impossible. Bangladesh is simply the chessboard other, bigger countries are playing out their international ambitions on.
Nowhere is this clearer than in the story of the ill-fated Sonadia seaport, which has seen Bangladesh flirt with the possibility of Chinese, Japanese and Indian investment in creating a harbor deep enough to handle large container ships.
While Dhaka first went with the package offered by Beijing, Tokyo interceded and offered an even sweeter deal. China lost the contract and Japan pocketed a major diplomatic win – as well as the honor of thumbing its nose at Beijing’s mandarins. Yet despite the man-hours invested in negotiations, and the number of deals brokered and then abandoned, Bangladesh still has no seaport and its economy suffers to the tune of $15,000 per day due to delays caused by traffic congestions at the country’s other two ports.
Not only is the Chinese ICT deal just the latest nudging of a chess piece by one of the major players in the region, we can soon expect a counter move. And so Bangladesh will continue to find itself as it is now: always dizzyingly on the cusp of something transformative happening, but never quite getting there. Or in this case, stuck staring at the egg-timer icon, waiting for the page to load.