Between the rock of northern multilateralism and the hard place of the southern challenge

When Bangladesh enthusiastically ratified China's equally assertive Asian Infrastructural and Investment Bank (AIIB) initiative, this year, it was no doubt ventilating some of the frustration spawned by the World Bank backtracking from the 2013 Padma Bridge commitment. As China stepped in, a fraying World Bank unnecessarily strengthened the AIIB case as an alternative to western multilateralism: Bretton Woods pillars had served as the fulcrum of Western/Atlantic/Northern multilateralism from the late 1940s in monetary and trade institutionalisation, more generally, the United Nations network to which they all belonged.

Yet, accepting AIIB as a "southern" alternative is tough medicine: just as the Trans-Pacific Partnership (TPP) directly aims to isolate China, the AIIB goal is to isolate the United States, one reason why the United States is not joining, in spite of selected other western countries and India expressing observer-status or full membership interest. On a business negotiating table, forging multiple multilateral/plurilateral membership carries mileage, even if it means dispatching more diplomats to more destinations without always bringing back some meat. On a similar political table, however, the multiplicity and redundancy predict unnecessary tension for the long-haul, and particularly when they function within a power-competitiveness framework, as China's leadership climb is obtrusively encouraging today. The end-result leaves both sides worse off. Our infrastructural crusade directs us to money-markets, not blueprint-building, architectural rearrangements of the extant order, or turf-battles of contending powers.

On the one hand, China's south-south partnership drive appeals to countries like Bangladesh, and meshes well with the prime minister's call for developed countries (DCs) to do more for their less developed counterparts (LDCs), especially in terms of intellectual property rights that emerging/frontier economies like Bangladesh's do not want to be bottled-up by. Most of all, since China quickly relieved Bangladesh's brief Padma Bridge embarrassment over a critically needed infrastructure, holding hands with China over other similar projects only made sense. That must still remain the purpose of only one hand, leaving the other to beckon new friends. At its extreme, China's AIIB initiative will produce across Asia what the U.S.-funded Marshall Plan produced across Europe after World War II: growth in ideologically compatible countries, leaving in the lurch such naysayers as the Soviet Union and East Europe then, and conceivably India and Japan for China now. If we can do business without political strings, incremental gains await us every step of the way.

On the other hand is an entirely Bangladesh-centric long-term view. As the Asian Development Bank (ADB) noted, our annual growth-rate improved to 6.7 per cent for the year when the rest of the world failed to improve (or the World Bank calculation of our 6.5 per cent growth-rate remaining the same as last year's, while other countries have registered less impressive figures). Our need to climb up from and sustain our middle-income status demands we not only cross 7.0 per cent on a consistent basis each year, but also notch a double-digit growth-rate every now and then.

That expansion depends (and has depended) directly upon exports and foreign exchange earnings. Since our dominant exports do not go to "southern" markets, our "southern" market probes, particularly across Latin America, may offer too little too late to have any major growth-rate impact: these markets take 3-5 years to develop, and a minimum of 10 to equal the size of their "northern" counterparts in the best case scenario. Our income during that interim must continue to come from established, "western" markets, "north" of the equator. To show any indication of jumping the "northern" ship would put into motion all sorts of business alarm-clocks to our detriment. That cannot be our route, since in 2015 there seems to be an emerging and mutually constructive convergence and conversation between the "north" and Bangladesh on many fronts, an opportunity to be seized, not left for bargaining.

China's President Xi Jinping agreed to Prime Minister Sheikh Hasina's proposal in New York in September 2015 to narrow the Bangladesh-China trade-gap. Our next task should be to push the RMG (ready-made garment) sales-pitch to the hitherto leading RMG exporter, China, which is already facing the pressures of diminishing returns. This should become a "strategic" goal while RMG comparative advantage still lies in our favour for the next 5-10 years. Until any concession is made on this front, to want to roll over at China's AIIB command would be an untutored policy-response for which we may have to more to lose than gain over the long haul.

South-south conversations/platforms/prognostications have been around for over a half-century (one recalls the futile 1975 New International Economic Order, even before that Raúl Prébisch's articulation of structural trade inequalities between the "north" and the "south"), but they have  not supplied the meat less developed countries (LDCs) needed to vault into developed ranks. In fact, only when these were all abandoned slowly, but steadily, by LDC neo-liberalism from the 1980s, did some countries make the critical developmental breakthrough under "northern" auspices (Brazil, Chile, Mexico, among others).

    With trade, Bangladesh snuggled into neo-liberalism with more heart, mind, and soul than many other countries, but divesting here would be equally costly as with investment. That does not mean we cannot explore other plurilateral agreements, particularly those with softer terms on intellectual property rights and GSP (generalised system of preferences) equivalents, but working to soften "northern" terms over both must continue simultaneously since our markets are there for now, have been there historically, and will continue to be there during our middle-income lifespan. Again, only with conducive changes in bilateral trade can we push the China card: it is a huge market that we must access, if not in the short-term through RMG exports, then later through new product-lines.

Besides, if we are to get the $8.0 billion our Board of Investment says we need for infrastructural development, and to get it rapidly, we do not have the choice but to shop in every money market, "northern" and "southern". We may be too wed-locked to "northern" multilateralism, but experimenting with China's more relaxed labour approach to see what worker-employee infrastructure eventually evolves as our appropriate style should not be discarded, in case the GSP-denial continues longer than expected, and the worse-case TPP outcomes become our reality (they should not if, and only if, we play the juggling game rather than adopt sine qua non posturing).

Though it is a complex and overly multi-dimensional, one common, central, and commanding globalisation feature has been to open options and distribute one's eggs in as many baskets as possible. This requires overcoming China or U.S. pressure groups in Dhaka, and a leadership that shows the capacity to be inclusive rather than exclusive or vindictive. At no juncture in this century, and even less in the previous, have we reached a crossroads like this. Reassuringly this year, the prime minister is demonstrating, through the awards she won, the substitution of World Bank funding, and the Waldorf Astoria engagement with businessmen that we are ready, willing, and able to walk down the "northern" multilateral pathway (a) with needed adjustments, and (b) without having to foreclose other options. That keeps the door open for the private sector and the "northern" bloc, a subject the series turns to next.

The writer is Professor of International Relations, formerly in Universidad Iberoamerica, Mexico City.

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