Japan initiates economic roadmap for Bangladesh's coast to counter Chinese plans

Japan is assisting Bangladesh turn its coast into an economic hub countering China's endeavour to increase its presence in the Bay of Bengal region.

The move could also transform the economy of the region and benefit India's landlocked north-eastern region, reports The Economic Times. 

Experts familiar with the matter said work in Japan-led development of a coastal economic corridor in Bangladesh is in full swing, which consists of a power plant, port and corporate parks. This is being seen as a Japanese effort to balance China's influence in the region.

The Japanese projects will connect landlocked north-eastern India with the Bay of Bengal and at the same time tap into the local markets. Meanwhile, China is eyeing a permanent presence in the Bay of Bengal via Bangladesh and Myanmar.

Under the Bay of Bengal Industrial Growth Belt (BIG-B) initiative, Japan has been implementing projects for improving connectivity, developing infrastructure and accelerating industrial growth along the Dhaka-Chittagong-Cox's Bazar belt area.

The BIG-B initiative aims to boost connectivity between Bangladesh and its neighbouring countries Bhutan, Nepal and northeastern India, and make it the heart of the regional economy. Under this initiative, Japan is developing the Matarbari Deep Sea Port in Chattogram, coal and gas-based power plants, and a liquefied natural gas (LNG) terminal in Matarbari, according to officials.

Professor Prabir De of Research and Information System for Developing Countries (RIS), MEA, who has been researching connectivity projects in north-eastern India, Bangladesh and Southeast Asia, told The Economic Times, "Japanese investment in Bangladesh is rising fast. Most Japanese textile and food companies have opened units in Bangladesh. A new deep-sea port and economic zone at Matarbari near Cox's Bazar is going to be ready by 2024. 

"This development is treated as part of Japan's new FOIP. India is also investing heavily in the infrastructure sector in Bangladesh, thereby strengthening its internal linkages as well as with northeast India and West Bengal."

The Bangladesh-India-Japan trilateral partnership has high potential to unlock the industrial value chains between Bangladesh and northeast and east India, Prabir De said, adding that Tripura could become a new gateway to the east.

"Three countries are in the process of negotiating bilateral CEPAs. A free trade region among them will eventually happen by 2025. With elevation to the developing world in 2026, Bangladesh needs Japan and India as the country's most trusted development partners to meet its aspiration to become a resilient developing economy by the turn of this decade," he said.

Japan International Cooperation Agency (JICA) is implementing the Moheshkhali-Matarbari area project to facilitate smooth transportation of goods. It will be connected with Dhaka by rail, road and inland waterway.

Bangladesh, in cooperation with JICA, is also developing a Japanese EPZ in the suburbs of Dhaka at Narayanganj's Araihazar, which will house manufacturing units of agro-food, light engineering, chemical, automobile assembly, garments and pharmaceutical industries, among others.

Northeastern India has emerged as an important area of cooperation between Japan and India due to Japan's historical ties with the region and its strategic location sharing borders with Nepal, Bhutan, Myanmar and Bangladesh.

Japan already has a big presence in Southeast Asian countries including Indonesia, Vietnam, Thailand, Myanmar and Bangladesh. As India's north-eastern region is the missing link, Japan is investing there aiming to bridge the gap.