Bangladesh’s ongoing construction of a deep-sea port in the south appears to be a critical point for Japan and India, with the QUAD members looking to challenge China’s sway.
The Port of Matarbari, a Japan-funded project, will be located north of Sonadia on the Bay of Bengal. China was previously expected to construct a port in this prime location, but the plan was abandoned a few years ago. India and Japan have joined hands to counter China. Both countries are building a deep-sea port in Bangladesh, and this will counter China’s String of Pearls strategy to encircle India.
India, Bangladesh and Japan have decided to explore the possibility of a trilateral to unlock potential of landlocked Northeast through the Chittagong Port and Tokyo-funded deep-sea port in Bangladesh’s Matarbari. The decision was taken on Wednesday following two-days of talks between ministers from India and Bangladesh and top Japanese officials in Agartala, the capital of Tripura. The meeting focussed on connectivity and industrial value chains. The three countries decided to promote capacity building and soft power initiatives as India pressed Japan to increase investments in the Northeastern region over and above current projects.
Greater involvement of Japan will pave the way for industrial value chains and a comprehensive connectivity development of Northeast India and Bangladesh. Japan is investing in the region, including in the deep-sea port at Matarbari in Bangladesh, which will connect the landlocked region with the Bay of Bengal.
Amidst these, Bangladesh and Japan are likely to sign 8-10 agreements and MoUs during Prime Minister Sheikh Hasina’s upcoming visit to Japan as the two countries are willing to take the bilateral relations to a new height. Although trade and investment have dominated Japan and Bangladesh so far, defense sector is joining this time. In addition to trade and investment, defense cooperation will also be important in Prime Minister Sheikh Hasina’s visit to Japan. Both the governments of Bangladesh and Japan hope that this visit will further strengthen the friendly relations between the two countries. Japan wants to elevate the bilateral ties with Bangladesh to a “strategic” level, adding more elements like defence and security areas to the growing relations.
Sheikh Hasina will visit Japan from April 25 to April 28. A letter of intent was signed between the two countries to open the field of defense cooperation during that visit recently. Japan, like the US and Europe, is working on separate strategies for India and the Pacific region. Along with trade and investment, the country wants to expand its activities in the field of defense. Bangladesh’s long-standing relationship with Japan can be called ‘Comprehensive Relationship or Comprehensive Partnership’. They want to develop it into a strategic partnership. To do that, defense cooperation will be an important adjunct. There are many other things. This will be an ‘important aspect’ of this visit. Agreement with Japan is also to be made for the desired cooperation. Due to lack of time, only the ‘Letter of Intent’ will be signed as the contract issues cannot be finalized this time. The signing of the memorandum of understanding means a general and preliminary agreement that the two countries are interested in further cooperation in this matter. An idea of what that collaboration might cover can be found there. Perhaps more concrete agreements will be signed between the two countries in the future based on this.
Prime Minister Sheikh Hasina last visited Japan in May 2019. Shinzo Abe was the Prime Minister of Japan at that time. Japan is the biggest bilateral development partner of Bangladesh. From 1972 to May of this year, the amount of Japan’s promised development cooperation was two thousand 743 million dollars.
Japan is working on a strategy called ‘Free and Open Indo-Pacific’ or FOIP with India and the Pacific region. There is talk of defense and security cooperation along with trade, investment and infrastructure development. Bangladesh joined Japan’s ‘Bay of Bengal Industrial Growth Belt’ initiative during Prime Minister Sheikh Hasina’s visit to Tokyo in 2014. The initiative is known as ‘Big-B Initiative’ for short. While the Big-B plan focuses primarily on economy, infrastructure and development, it also has geopolitical aspects. It is conceivable that Japan is seeking to increase its strategic influence in South Asia. The country’s then ambassador Ito Naoki said last year that Japan is interested in determining what to do to increase cooperation with Dhaka in the defense sector. At that time, he said that this cooperation mainly focused on maritime security. Speaking about the expansion of relations with Bangladesh in a recent event, he said about the possibility of supplying defense equipment from Japan.
Ito Naoki said, “I think we can focus on more cooperation in defense and security. And we are looking at the possibility of exporting defense equipment to Bangladesh. A Japanese company has also shown interest in supplying defense equipment.” During Prime Minister Sheikh Hasina’s visit to Japan in 2014, there was talk of elevating the relationship between the two countries to the level of ‘integrated partnership’. The then Prime Minister of Japan Shinzo Abe visited Dhaka that year. It was then that the field of stronger economic partnership was prepared under ‘Big-B’. In international relations terms, the highest level of ties in the relationship between two or more countries is a ‘strategic partnership’. Comprehensive partnership (comprehensive partnership) is a bilateral relationship with all the pros and cons. A strategic partnership contemplates a larger alliance beyond the bilateral. When you say comprehensive, it means bilateral, big and small. The thing about strategic partnerships is that you can think outside the box. Beyond the two, you can have a conversation.
China views US and Japan’s strategy with India and the Pacific region with suspicion. On the contrary, this superpower of Asia is implementing the ‘Belt and Road Initiative or BRI’ with the aim of connecting African and European countries with Asia by road and sea.
Whether there will be any impact on Bangladesh’s relationship with China if defense cooperation with Japan, WE CAN SAY THAT, Bangladesh will not go into any conflict with anyone. BANGLADESH’S friendship or relationship with Japan is very old. So, if they want to work on more infrastructure in the other possibilities, starting from ITS southern side, the Matarbari-centric deep-sea port, THEY would welcome it.
The BD government issued this commemorative coin to mark 50 years of Bangladesh-Japan diplomatic relations. The possibility of increasing communication with Nepal, Bhutan and India’s north-eastern states is largely dependent on the development of infrastructure in the southern part of the country. If the development work can be done with the cooperation of Japan, then Bangladesh will be able to advance the rest of the issues in the future. After the horror of the atomic bomb in World War II, Japan focused on economic reconstruction. They kept their military ambition suppressed for a long time. Japan’s position in defense and security has changed since the time of former Prime Minister Shinzo Abe. America also has a kind of desire from Japan that Tokyo should be a little more pro-active in terms of security. America often says Japan should be more active in the Indo-Pacific Alliance. The possibility of Japan being active ‘geopolitically’ cannot be completely ruled out. Japan is interested in selling arms due to the increase in Bangladesh’s capacity in recent years. If Japan has approached the issue of selling arms, then it is understood that there is a difference between Bangladesh 20 years ago and Bangladesh today, it can return it. Now it remains to be seen what it will do.
The government does not disclose the precise account of when and how much arms Bangladesh bought from any country. However, according to the Stockholm International Peace Research Institute, Bangladesh bought arms worth 401.9 million US dollars from 18 countries from 2003 to 2021.
Out of this, the largest number of arms worth 2.883 billion US dollars was purchased from China. Arms worth $49.6 million have been purchased from Russia, which is in second place.
Besides, various countries including USA, UK, India, Italy, Turkey, Ukraine, Serbia are in the list of arms exporters in Bangladesh. Bangladesh has defense or military agreements with several countries including China, India, Saudi Arabia, Qatar, Russia, Turkey. Defense cooperation agreement was also signed with France during Prime Minister Sheikh Hasina’s visit to Paris last year. If arms or military equipment are bought from Japan, care should be taken that it does not affect Bangladesh’s relationship with any third country. If Japan stipulates that we cannot have relations with China due to the purchase of their weapons, or it has to be used against China, then Bangladesh will not be interested.”
An agreement to boost trade by reducing tariff barriers is expected during the Prime Minister’s visit to Japan.
FTA signing process
Dhaka and Tokyo have been working for some time on the possibility of free trade agreement (FTA) to ease the way of trade. The two countries are also thinking about making an agreement like ‘Comprehensive Economic Partnership Agreement or CEPA’ before doing FTA. The process of joint research and feasibility study on a large scale will be finalized during the Prime Minister’s visit. Before doing such (agreement), a study has to be done, it will be finalized now. This is the first step. Then they have to go step by step according to the rules, that will happen.” The Japan External Trade Organization (JETRO) and the Japan-Bangladesh Chamber of Commerce and Industries (JBCCI) published a research survey in Dhaka in June, 2022, on what kind of results will come if the Dhaka-Tokyo FTA is signed. The survey was conducted on 100 Japanese and 30 Bangladeshi multinational companies. Of these, 85 percent, or 111 companies, said they expected the Japan-Bangladesh FTA to be signed.
In that survey, 20 percent of Japanese companies said that they may consider relocating from Bangladesh to competitive markets such as ASEAN, China or India if Japan’s Preferential Trade Facility (GSP) is lifted after Bangladesh’s transition from LDC. Or reduce production.
Then Japanese Ambassador to Dhaka Ito Naoki said at the release of the survey that Bangladesh will not have the current GSP facility if it transitions from LDC. In that case new management is needed, something like FTA may be. “No one can keep the previous GSP benefits even if they want to transition from LDCs, because there is no legal framework. FTA can be an important legal framework in this regard.”
In recent days, as part of the process of moving factories from China, Japan has increased investment activities in Bangladesh. Free trade is not always free, Bangladesh has to keep that in mind. Japan’s interest has increased as it moves many industries away from China.
China is becoming costly. Because China’s labor costs are rising. They (Japan) are more interested in our economic zone – etc., because if they can move out of there (China), their profit margin will increase. Japan is interested in Bangladesh because of the increased profit rate due to low-paid labor and the market of 170 million people. There is geo-politics. The business community does not move with politics. He always sees profit. But we have to take care not to harm other markets. If not, we will be in another trouble. The issue of business and investment will be given extra importance in the Prime Minister’s visit. A large delegation from Bangladesh is going to Japan this time.
Bangladesh Economic Zone Authority (BEZA), Bangladesh Investment Development Authority (BIDA) and Securities and Exchange Commission along with various individuals and organizations have programs there. The Prime Minister has a schedule of meetings with the executives of Japanese companies investing in Bangladesh’s two and a half thousand economic zones. Big projects are in the pipeline, emphasis SHOULD be placed on them.
According to Bangladesh Bank, Bangladesh imported $243.58 million from Japan in the fiscal year 2021-22. On the contrary, Bangladesh has remained 135 million 38 million dollars’ worth of products.
An agreement to increase trade by reducing tariff barriers between the two countries is expected to be signed during the Prime Minister’s visit this year. The draft agreement titled ‘Agreement on Cooperation and Mutual Assistance in Customs Matters’ has also been approved by the Cabinet on Nov. 14.
Japan’s cooperation will be sought for the repatriation of the Rohingyas as usual during the Prime Minister’s visit. Myanmar has very good relations with Japan. Now, since the military junta came to Myanmar, there seems to be a slight decline. Still, they have some influence if we consider their investments, other things. If it can be used to assist us in repatriation, I would certainly like it. Japan can also be offered a tripartite initiative like China regarding Bangladesh-Myanmar. Myanmar’s relationship with Japan is good, Bangladesh’s relationship with Japan is good. So why is he not taking a tripartite initiative? So that the repatriation of Rohingyas can be expedited, the Prime Minister can highlight the matter.