Yunus' hyped up 'successful' visit to China has not yielded much for Bangladesh

Yunus’s visit to Beijing came amid a growing rapprochement between Bangladesh and Pakistan with both countries trying to rope in China as well for diplomatic heft.

The attempt of the coming together of the three countries is taking place after former Bangladesh Prime Minister Sheikh Hasina has been ousted from power and an Islamist-dominated interim arrangement is in control in Dhaka, while Bangladesh’s relations with India have nosedived.

Also read: Yunus invites China into Bangladesh, saying 7 Indian states are ‘landlocked’

China cautious

Yunus was accorded a warm welcome in Beijing where he met Chinese President Xi Jinping and other senior leaders and business heads.

But China refrained from making any serious financial commitment at this juncture though it shared Yunus’ vision of raising the bilateral relations to a higher level.

Bangladesh, however, managed to sign only one agreement, though there were eight Memorandum of Understanding (MoUs) with China during Yunus’ four-day visit.

That indicates Beijing’s cautious approach before deciding to expand cooperation with Bangladesh.

Chinese investments

China committed US$ 2.1 billion in investment, credit and grants. In addition, around 100 Chinese companies committed to invest US$ one billion in Bangladesh’s special Chinese Economic and Industrial Zone.

No dates have been specified when the investment will be made by the Chinese companies. Experts say that it is expected to come only after the proposed Chinese Economic and Industrial Zone comes up in the Bay of Bengal.

“All this is positive but I think we had higher hopes,” former diplomat M Humayun Kabir, who is also the president of Bangladesh Enterprises Institute in Dhaka, acknowledged in an interview with the Bengali daily Prothom Alo.

Bangladesh had expected a commitment of US$ 10 billion that would have increased Bangladesh’s current GDP by 4 per cent. Its current GDP is around US$ 450 billion.

Bangladesh’s foreign exchange reserve is currently around US$ 25.44 billion. Besides, the country is also facing high inflation and high food prices.

It is also suffering from a serious law and order situation and frequent political clashes between rival groups.

All these factors may have played a role in making China more cautious about making a bigger financial commitment in Bangladesh, say observers.

Bangladeshi experts often compare the sluggish manner in which India executes its projects in Bangladesh with the time-bound completion of projects by China.

But Beijing has a track record of being extremely careful about its investment in Bangladesh and several of its past projects are yet to be executed.

Also read: Bangladesh should see China as a good friend, says Yunus; expects ties to enter new phase

Belt and Road Initiative

During President Xi’s 2016 visit to Dhaka, China had committed to invest US$ 40 billion in Bangladesh under its Belt and Road Initiative.

Of which, 26 US$ billion was for infrastructure development projects and 16 US$ billion for joint venture projects.

But so far, China has only given US$ 4.45 billion to Bangladesh for 35 projects.

The pending projects were part of Yunus’s discussion with Xi during their meeting. No deadline was, however, set after the talks to complete the committed projects in Bangladesh.

Yunus under pressure

The external source of funding for Bangladesh has dried up significantly in recent months as Dhaka’s relations with Delhi have been strained since Hasina departure in August last year.

The pressure has increased more with the US under President Donald Trump cutting off development funds to Dhaka.

His trip to Beijing was an attempt to signal to India that Bangladesh can rely on other partners beyond India. But the hype about a successful visit does not justify what Yunus managed to get from China.

Bangladesh’s recent attempt to reach out to Pakistan to tide over the shortage of rice in the country, was also part of the diplomatic rhetoric than a partnership that can be sustained to replace India.

The rice supplied by Pakistan is not only more expensive than what Bangladesh used to get from India but the 50,000 metric tonnes that Islamabad managed to supply was far less than the amount that Bangladesh was looking for.

Also read: China agrees to deepen ties with Dhaka ahead of Yunus-Xi talks

Experts say that Bangladesh will now have to get more rice from other countries like Vietnam, even if it wants to avoid India for political reasons.

Later this month, Pakistan’s deputy prime minister Ishaq Dar, who is also the country’s foreign minister, will visit Dhaka for bilateral talks and to renew trade and economic cooperation.

Yunus has met Pakistan Prime minister Shahbaz Sharif twice, but has not yet had a face-to-face meeting with Indian Prime Minister Narendra Modi.

Bangladeshi experts point out that though Delhi says it was willing to engage with any regime in Bangladesh, it has so far avoided fixing a meeting between Yunus and Modi.

They allege that this is a reflection of India not coming to terms with the ouster of Hasina, its close ally, from power in Bangladesh.

Bangladesh is likely to make another attempt for a meeting between Yunus and the Indian Prime Minister when they meet in Bangkok in the next few days for the BIMSTEC summit.

There is, however, no clear indication yet whether India is willing to set up such a meeting between the two leaders.

Also read: ‘Offensive, dangerous’: Indian leaders slam Md Yunus’ 'guardian of ocean’ remark

Countries hedging their bets

Pakistan has been extremely enthusiastic about the renewal of contacts with the Bangladesh interim government.

During Hasina’s 16-year-long rule Dhaka’s ties with Islamabad were kept at a low key.

The Pakistani establishment may be looking at the current rapprochement with Dhaka as an opportunity to enhance its activities in the country and to try and destabilise India’s eastern front with Bangladesh.

But much will depend on how far Yunus and more importantly, a new government that will be elected after the year-end national elections in the country, are willing to pursue the Pakistani design to unsettle India.

Meanwhile, China, which has kept good relations with all political parties, including the Islamists after Hasina’s ouster, is trying to consolidate its position in Bangladesh. But that does not necessarily mean it will engage in activities challenging India’s strategic interest in the country.

A lot will depend, however, on how India-China relations, after the resolution of their long border stand-off, pans out in the coming days.

For Yunus, getting too close to China can also pose a serious challenge in his relation with the Trump administration in the US.

In future, Yunus and other leaders in Bangladesh who replace him, will have to strike a deft diplomatic balance to maintain relations with both China and the United States.

But under a maverick US President keeping that balance will be a huge challenge.