The BIG-B and One Belt One Road Initiative

The initiatives of BIG-B (The Bay of Bengal Industrial Growth Belt) led by Japan and the BCIM (Bangladesh-China-India-Myanmar) economic corridor officially classified as closely related to the 'One Belt and One Road' ( OBOR) initiative of China are slowly emerging as a chess board centring the geo-politico-economic scenario of Bangladesh. Being a country located between the Indian Ocean and the Asian continent, Bangladesh can provide the gateway to the Bay of Bengal for the South Asian hinterlands that are landlocked as well as offer them a common border with Bangladesh. It is also pertinent that economic regionalism in the Bay of Bengal bears enormous potential to mitigate regional problems like cross-border terrorism and refugee crisis.

The BIG-B is a design for regional economic transformation in South Asia. It is argued that globalisation of the world economy in the last quarter of the 20th century progressed with the centre of gravity moving from the Atlantic to the Pacific. But now in the first quarter of the 21st century, the world economy is shifting its centre from the Pacific to a much broader area called the Indo-Pacific region. While the Pacific continues to play an important role, the world economy will be increasingly integrated with the emerging economic powers along the Indian Ocean Rim. It is also argued that the Bay of Bengal is centrally located in this tectonic change and that Bangladesh India and Myanmar would transcend their  national borders to become a "node & hub" of this emerging regional economy.

BIG-B is expected to create a number of economic opportunities. The initiative is essentially a set of basic infrastructures that will significantly reduce both production and transaction costs. The expected reduction in production and transaction costs will have several long-run implications. A sustained reallocation of labour is likely to happen from low-productivity agriculture and manufacturing to high value-added and outward-oriented export production.

In a situation such as this, deeper integration into the world economy is a prospect that Bangladesh can confidently look up to.  The "nod & hub" likely implies that Bangladesh may emerge as a platform of final stages of assembling and exporting. That essentially indicates that multinational corporations (MNCs) around the world would redirect foreign direct investment (FDI) and know-hows to this economic region. In this way Myanmar, Bangladesh and India can potentially be a part of global production chain.

It is suggested that the south Asian region in general and Bangladesh in particular must be a partner of economic regionalism and should join, for example, the Regional Comprehensive Economic Partnership (RCEP). RCEP is currently being negotiated among the ASEAN countries and Japan, China, South Korea, Australia, New Zealand and India.

The BIG-B initiative comprises three pillars. The first pillar is industry and trade and consists of constructing a long awaited deep sea port at a place  located in the eastern coast of Bay of Bengal, close to the  Chittagong City and along the highway connecting the Myanmar and China. The second pillar is energy. The region can be developed into a massive supply base of primary energy (such as coal, LNG and oil). The third pillar of BIG-B is transportation. It is envisioned that to increase trade and industrial productivity the Dhaka-Chittagong-Cox's Bazar transport artery needs to be strengthened and extended to neighbouring countries. Again it is felt that introduction of more and improved national highways and railways are an absolute must to accelerate the movement of goods and people across the belt.

The BIG-B initiative is to accelerate industrial agglomeration along the Southeast Asian region and beyond, envisaging development of economic infrastructure, improvement in investment environment and fostering connectivity. The BIG-B foresees Bangladesh, in particular, as transcending its national borders to become a heart of the regional economy and providing a gateway for both South Asia and South-East Asia to step into a closer inter-regional relation, so that she may reshape herself as a sparkling trading nation deeply incorporated into inter-regional and global value chains.

Interestingly, in another move for regional development Chinese President Xi Jinping came up with the initiative of jointly building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road when he visited Central Asia and Southeast Asia in September and October of 2013. According to this Chinese move, essentially, the 'belt' includes countries situated on the original Silk Road through Central Asia, West Asia, the Middle East, and Europe. The initiative calls for the integration of the region into a cohesive economic area through building infrastructure, increasing cultural exchanges and broadening trade ties. Apart from this zone, which is largely analogous to the historical Silk Road, another area that is said to be included in the extension of this 'belt' is South Asia and Southeast Asia. Many of the countries that are part of this 'belt' are also members of the China-led Asian Infrastructure Investment Bank (AIIB). The Maritime Silk Road, also known as the "21st Century Maritime Silk Route Economic Belt"  is a complementary initiative aimed at investing and fostering collaboration in Southeast Asia, Oceania, and North Africa, through several contiguous bodies of water - the South China Sea, the South Pacific Ocean, the wider Indian Ocean area and Bay of Bengal in particular.

The One Belt One Road (OBOR) project aims to redirect China's own domestic surplus capacity and capital for regional infrastructure development to improve trade and relations with the South Asian, Central Asian and European countries. However, very recently the Economist Intelligence Unit (EIU) has indicated that up to 60 countries may be included in OBOR with stops across three different continents. In addition to political objectives, OBOR brings a strategic focus which encourages Chinese firms to go abroad in search of new markets or investment opportunities. Led from the highest levels of the government the OBOR push is backed by substantial financial fire power, with the government launching a US$50bn Silk Road Fund that will directly support the OBOR mission. While the strategy promises opportunities for domestic companies, the route is unlikely to be an even one. The proposed countries range from Singapore to Syria. The companies involved could be heading into territories that may be strategically important for China's foreign relations, but challenging to navigate.

Dr Muhammad Abdul Mazid, Former Secretary and Chairman NBR, currently Chairman Chittagong Stock Exchange and Senior Vice Chairman, South Asian Federation of Exchanges. [email protected]