Potentials of Sino-Bangladesh cooperation
Friday, 19 September 2008
Syed Fattahul Alim
Foreign Investment is nowadays universally recognised as the assured path of industrialisation and growth in the developing and the Least Developed Countries (LDCs). And it is exactly along this tested path of development that modern-day China has been able to achieve its phenomenal growth since it chose its path of modernisation during the last three decades. China had no doubt been progressing even before it started its modernisation drive, but that progress was not as fast and comprehensive as it turned out to be in its latter phase.
China has long been a tested friend and partner in Bangladesh's development. Its policy of non-interference in the internal affairs of other countries, especially its close neighbours, is well-known. What is of further significance about its attitude towards its own development is that China, unlike many newly emerging economic powers, does not consider itself as a big power, though it is truly so. Though China is now called the 'factory of the world' and is already an economic super power poised to overtake the world's wealthiest country, the USA, in the not-too-distant future, this Asian giant does still calls itself a developing nation. Such attitude on the part of China about its relation with other nations should not be looked upon as a demonstration of modesty. On the contrary, it is part of the country's foreign policy, which can been traced back to its revolutionary emergence and its own protracted struggle against foreign hegemony. It is not surprising then that China has consistently pursued the policy of helping friendly countries in Asia, Africa and Latin America so that they might develop their economy without being dictated by any hegemonic power.
Bangladesh as an old friend of China has a lot to learn from its economic as well as foreign policy pursuits. Against this backdrop, the Chief Adviser's four-day official visit to China bears an especial significance. During the visit Bangladesh has signed one agreement on economic and technical cooperation and two memoranda of understandings (MOUs) on agricultural technical cooperation and on the hydrological information on the Brahmaputra River. Aside from these agreements, the Chief Adviser during his exchange of views with the representatives of the local business community, did welcome the Chinese businessmen to invest in the various sectors of the economy including power, telecommunications, transports, etc. Issues like creation of special and exclusive economic zones for Chinese investment supported by Bangladesh's cheap and trainable labour force and its investment-friendly economic policy featured prominently in the discussions.
The areas that need most foreign investment include basic industrial infrastructures such as power, transport and telecommunications. In point of fact, a developed infrastructure is the best offer that a country might make to a foreign investor in the economy. One may recall in this connection that Bangladesh has long been claiming that its incentive package for foreign investment is the best of its kind so far. Moreover, there is the abundance of cheap labour in the country. Why do not then foreign investors flock to Bangladesh to take advantage of these benefits offered to them? On the contrary, in spite of the fact that its economy is still basically a state-controlled one, China has during the last few decades remained a Mecca of foreign investment. To get the answer, one has to go into the history of the post-revolution China when it meticulously developed its basic communications and other infrastructures. Though it was still operating from behind what the western media called the 'Bamboo Curtain' to contrast it with the then Soviet Union dubbed 'Iron Curtain, by the selfsame propaganda apparatus of the West, China, before its modernisation era, had already developed its basic infrastructures to a substantially advanced level.
Moreover, it had already set its strategy on developing industries from the light to the heavier ones. As a result, when the top leadership there opted for a more open-door policy towards its economic growth, it was an instant success. Foreign investment flowed into the country in an uninhibited fashion. So, the issue is not as simple as it might look on the face of it. An investment-friendly policy alone, though a necessary precondition, is not still a sufficient one for the uninterrupted flow of foreign investment in a country. One may well draw a comparison between pre-modernisation China and present-day Bangladesh. How do our communications infrastructures stand vis-à-vis the country's famously open and pro-investment economic policy?
To say that our communications and other basic infrastructures are in a dilapidated condition is to say the least. Moreover, another powerful inhibitive factor that flew in the face of all the wooing and cajoling of the foreign investors is pervasive corruption in the administration. But in the beginning when the modernisation drive began, China in the seventies of the last century was more or less free from these impediments and vices. The Chinese administration, once it decided to open its door to the rest of the world, never looked back. But in our case, the picture was different. Though ours was never a state-controlled economy in the sense that it was in China or other one-party controlled economies, the bureaucracy here would always claim its pound of flesh from any enthusiastic party when doing business with Bangladesh regardless of its origin. It made no distinction between the local and foreign antecedents of a prospective entrepreneur. So, poor infrastructures and a corrupt administration together rendered growth and industrialisation of the country a rare prospect.
However, the students of the country's economic development are too familiar with this common discourse. But mere familiarity does not make an issue redundant. After two years of anti-corruption drive in the country, the government needs to face facts and accordingly design its policies so that foreign investors are not dismayed to face the same old impediments to their investments as they had come across in the past. This is true of investors from any part of the world, be it from China or elsewhere.
The prospective Chinese investors, the representatives of whom the Chief Adviser addressed in Beijing, might be willing to know all these facts before they might like to risk investment in Bangladesh. So, it would be very fitting on the part of the government to assure them of these issues.
Meanwhile, to develop its power, communications and other basic infrastructures, Bangladesh needs to closely follow its powerful East Asian neighbour. For example, China depends on coal, hydroelectricity and nuclear power to supply the energy necessary to fuel its huge industrial machine as well as to keep the homes of its citizens lighted and warm. Though coal is notoriously a dirty fuel to produce power, China has been continuing to use it despite all arguments against it. China has been compelled to take this unavoidable path knowing fully well the hazards that go with this option. This is kind of compromise one has to make when the choices are limited and the priority of national development is overriding. Developing nuclear energy is another cornerstone of China's own energy policy, which it has been following consistently since the beginning. Though its nuclear policy was looked upon with suspicion by the West in the 1960s, its claim to the status as a member of the elite club of the global nuclear powers is now a fait accompli.
Bangladesh, though it does not bear comparison with China on all these vital issues of national priority, has still many common points to mark its teething development problems. Against this backdrop, it makes sense that China has shown keen interest in Bangladesh's pursuit of peaceful use of nuclear energy. The Ruppur nuclear power plant, the history of which goes back to the 1960s when it was first conceived by the then Pakistani government, is one such area of possibility where China can help Bangladesh with its vast know-how. The initial cost involved in installing a nuclear power plant is also a formidable challenge facing Bangladesh. But considering other advantages that nuclear power promises, for example, it is greener than coal or other fossil-based power producers and so on, it is a very strong option among all others to pursue for solving the country's ever-growing demand for power in the future. So, it should be considered a welcome move, if China comes forward with its own wealth of experience in this field for setting up nuclear power plant in the country.
Bangladesh needs to project a very positive outlook before the world at large with its independent and self-reliant policy whether in its foreign affairs or about its economic priorities. This image overarches all other issues, when a country opens its arms to the rest of the world. Such policy has paid well for China. Why should it not be the same for Bangladesh?
Foreign Investment is nowadays universally recognised as the assured path of industrialisation and growth in the developing and the Least Developed Countries (LDCs). And it is exactly along this tested path of development that modern-day China has been able to achieve its phenomenal growth since it chose its path of modernisation during the last three decades. China had no doubt been progressing even before it started its modernisation drive, but that progress was not as fast and comprehensive as it turned out to be in its latter phase.
China has long been a tested friend and partner in Bangladesh's development. Its policy of non-interference in the internal affairs of other countries, especially its close neighbours, is well-known. What is of further significance about its attitude towards its own development is that China, unlike many newly emerging economic powers, does not consider itself as a big power, though it is truly so. Though China is now called the 'factory of the world' and is already an economic super power poised to overtake the world's wealthiest country, the USA, in the not-too-distant future, this Asian giant does still calls itself a developing nation. Such attitude on the part of China about its relation with other nations should not be looked upon as a demonstration of modesty. On the contrary, it is part of the country's foreign policy, which can been traced back to its revolutionary emergence and its own protracted struggle against foreign hegemony. It is not surprising then that China has consistently pursued the policy of helping friendly countries in Asia, Africa and Latin America so that they might develop their economy without being dictated by any hegemonic power.
Bangladesh as an old friend of China has a lot to learn from its economic as well as foreign policy pursuits. Against this backdrop, the Chief Adviser's four-day official visit to China bears an especial significance. During the visit Bangladesh has signed one agreement on economic and technical cooperation and two memoranda of understandings (MOUs) on agricultural technical cooperation and on the hydrological information on the Brahmaputra River. Aside from these agreements, the Chief Adviser during his exchange of views with the representatives of the local business community, did welcome the Chinese businessmen to invest in the various sectors of the economy including power, telecommunications, transports, etc. Issues like creation of special and exclusive economic zones for Chinese investment supported by Bangladesh's cheap and trainable labour force and its investment-friendly economic policy featured prominently in the discussions.
The areas that need most foreign investment include basic industrial infrastructures such as power, transport and telecommunications. In point of fact, a developed infrastructure is the best offer that a country might make to a foreign investor in the economy. One may recall in this connection that Bangladesh has long been claiming that its incentive package for foreign investment is the best of its kind so far. Moreover, there is the abundance of cheap labour in the country. Why do not then foreign investors flock to Bangladesh to take advantage of these benefits offered to them? On the contrary, in spite of the fact that its economy is still basically a state-controlled one, China has during the last few decades remained a Mecca of foreign investment. To get the answer, one has to go into the history of the post-revolution China when it meticulously developed its basic communications and other infrastructures. Though it was still operating from behind what the western media called the 'Bamboo Curtain' to contrast it with the then Soviet Union dubbed 'Iron Curtain, by the selfsame propaganda apparatus of the West, China, before its modernisation era, had already developed its basic infrastructures to a substantially advanced level.
Moreover, it had already set its strategy on developing industries from the light to the heavier ones. As a result, when the top leadership there opted for a more open-door policy towards its economic growth, it was an instant success. Foreign investment flowed into the country in an uninhibited fashion. So, the issue is not as simple as it might look on the face of it. An investment-friendly policy alone, though a necessary precondition, is not still a sufficient one for the uninterrupted flow of foreign investment in a country. One may well draw a comparison between pre-modernisation China and present-day Bangladesh. How do our communications infrastructures stand vis-à-vis the country's famously open and pro-investment economic policy?
To say that our communications and other basic infrastructures are in a dilapidated condition is to say the least. Moreover, another powerful inhibitive factor that flew in the face of all the wooing and cajoling of the foreign investors is pervasive corruption in the administration. But in the beginning when the modernisation drive began, China in the seventies of the last century was more or less free from these impediments and vices. The Chinese administration, once it decided to open its door to the rest of the world, never looked back. But in our case, the picture was different. Though ours was never a state-controlled economy in the sense that it was in China or other one-party controlled economies, the bureaucracy here would always claim its pound of flesh from any enthusiastic party when doing business with Bangladesh regardless of its origin. It made no distinction between the local and foreign antecedents of a prospective entrepreneur. So, poor infrastructures and a corrupt administration together rendered growth and industrialisation of the country a rare prospect.
However, the students of the country's economic development are too familiar with this common discourse. But mere familiarity does not make an issue redundant. After two years of anti-corruption drive in the country, the government needs to face facts and accordingly design its policies so that foreign investors are not dismayed to face the same old impediments to their investments as they had come across in the past. This is true of investors from any part of the world, be it from China or elsewhere.
The prospective Chinese investors, the representatives of whom the Chief Adviser addressed in Beijing, might be willing to know all these facts before they might like to risk investment in Bangladesh. So, it would be very fitting on the part of the government to assure them of these issues.
Meanwhile, to develop its power, communications and other basic infrastructures, Bangladesh needs to closely follow its powerful East Asian neighbour. For example, China depends on coal, hydroelectricity and nuclear power to supply the energy necessary to fuel its huge industrial machine as well as to keep the homes of its citizens lighted and warm. Though coal is notoriously a dirty fuel to produce power, China has been continuing to use it despite all arguments against it. China has been compelled to take this unavoidable path knowing fully well the hazards that go with this option. This is kind of compromise one has to make when the choices are limited and the priority of national development is overriding. Developing nuclear energy is another cornerstone of China's own energy policy, which it has been following consistently since the beginning. Though its nuclear policy was looked upon with suspicion by the West in the 1960s, its claim to the status as a member of the elite club of the global nuclear powers is now a fait accompli.
Bangladesh, though it does not bear comparison with China on all these vital issues of national priority, has still many common points to mark its teething development problems. Against this backdrop, it makes sense that China has shown keen interest in Bangladesh's pursuit of peaceful use of nuclear energy. The Ruppur nuclear power plant, the history of which goes back to the 1960s when it was first conceived by the then Pakistani government, is one such area of possibility where China can help Bangladesh with its vast know-how. The initial cost involved in installing a nuclear power plant is also a formidable challenge facing Bangladesh. But considering other advantages that nuclear power promises, for example, it is greener than coal or other fossil-based power producers and so on, it is a very strong option among all others to pursue for solving the country's ever-growing demand for power in the future. So, it should be considered a welcome move, if China comes forward with its own wealth of experience in this field for setting up nuclear power plant in the country.
Bangladesh needs to project a very positive outlook before the world at large with its independent and self-reliant policy whether in its foreign affairs or about its economic priorities. This image overarches all other issues, when a country opens its arms to the rest of the world. Such policy has paid well for China. Why should it not be the same for Bangladesh?