Chiara Marchionni

During the last decade, Bangladesh has been considered one of the world’s fastest-growing economies. According to the World Bank, Dhaka’s growth rate was 6.9% as early as 2021, rising from 3.4% during COVID-19[1]. In addition, Bangladesh’s crucial geographic location and accessibility to the Bay of Bengal hold great strategic importance in regional politics. A quarter of the world’s traded goods, including significant volumes of Persian Gulf oil and liquefied natural gas, cross the Bay of Bengal. The Bay itself has vast, primarily untapped natural resources of oil, gas, and minerals, as well as fishing stocks. Thus other than Bangladesh, the northeastern part of the Indian Ocean attracts growing strategic interests from major powers such as China, India, and the United States[2].

Considering the country’s economic growth and geostrategic relevance, Bangladesh needs to improve its seaport networks to secure the regional upper hand on attracting global trade and foreign investment. Dhaka has long been interested in building its first deep-sea port. At present, Bangladesh has three main seaports, namely Chittagong, Payra, and Mongla[3]. However, these ports are extremely congested and have a shallow draft, making them unsuitable for docking ships with higher tonnage. Currently, such ships dock at transshipment hubs in Sri Lanka and Singapore, from where smaller vessels carry cargo to Bangladesh’s ports. For Dhaka, this results in higher trading costs, delays, and strategic dependence on neighbors’ infrastructures. Creating a deep-sea port will not only help cut such costs and facilitate Bangladesh’s trade, but it will also allow the country to become a new regional transshipment hub for landlocked countries like Bhutan and Nepal[4].

After a feasibility test in 2009, Sonadia Island, located in Cox’s Bazar district, was selected to construct a deep-sea port[5]. Beijing extended its help first to develop the new infrastructure, submitting a detailed project proposal and a loan plan to cover a significant part of the project cost[6]. China Harbour Engineering Company, a subsidiary of the Chinese state-owned China Communications Construction Company, also building the Colombo Port in Sri Lanka, was chosen for the project[7]. During Bangladesh’s Prime Minister Sheikh Hasina’s visit to Beijing in 2014, the anticipation for a deal on the Sonadia Port construction was high; but it did not come to fruition. No progress was made even during Chinese President Xi Jinping’s visit to Dhaka in 2016. Eventually, in August 2020, the Hasina government formally announced the cancellation of the deep-sea port project at a cabinet meeting[8]. After the meeting, Cabinet Secretary Khandker Anwarul Islam informed reporters that the project was canceled due to environmental concerns as the construction of a deep-sea port on Sonadia Island could cause severe damage to local biodiversity[9]

However, experts agree on the significant role geopolitics played in the project’s cancellation. In a scenario where Dhaka should fail to repay loans, as in Sri Lanka, China could gain control over the new strategic infrastructure in Sonadia, posing a significant challenge to New Delhi’s security[10]. India, Japan, and the U.S., which share wariness towards the growing Chinese presence in the Indian Ocean, were reported pressuring Bangladesh to turn down the project. 

This explanation gains further credibility if two other facets are taken into account. First, since Bangladesh’s liberation war in 1971, New Delhi has always had a strong relationship with the Awami League (AL), the country’s current ruling party[11]. Bangladesh’s government has a vested interest in acting in compliance with Indian security concerns. Secondly, an alternative new deep-sea port project was already being approved in Matarbari, only 25 km from Sonadia, to be realized with Japan’s assistance (Shepard, 2016).

Nevertheless, Bangladesh here is neither a mere ‘spectator’ nor a pawn at the service of other countries’ interests. To balance its relations with both Beijing and New Delhi, over the years, Dhaka has followed an active strategy of cooperative relations and engagement based on ‘friendship to all and malice toward none’. Bangladesh’s economic cooperation with its two big neighbors allowed it to undertake a significant socio-economic development process. Its economic diplomacy has become an example for other states in Indian Ocean Region (IOR)[12]. In addition, Bangladesh has been a careful borrower so far and has been cautious in accepting infrastructure development projects, selecting the ones that align with its national interests. Bangladesh is the second largest recipient, after Pakistan, of Chinese loans under the Belt and Road Initiative (BRI) in South Asia, but it is far from experiencing the same fate as Sri Lanka and Pakistan, who fell victim to the Chinese ‘debt trap’[13]. Dhaka actively applies a diversification strategy, benefiting from loans from different creditors and diversifying stakeholders involved in developing its ports and critical infrastructures (Ramachandran, 2019).

To sum up, geopolitics played a major role in the events related to the Sonadia Deep-Sea Port project. Furthermore, Dhaka was able to take advantage of the geopolitical interests at stake to come out as a winner. Bangladesh is building its first deep-sea port with Japanese funding, has proved to be a reliable security partner to India, and continues to welcome Chinese investment in several other projects. To conclude, the Sonadia Port case, on the one hand, shows the rising India-China competition for influence in South Asia and, on another supports the idea that Bangladesh’s pragmatic approach to utilizing the bargaining power is a compelling example of diplomacy for smaller countries[14].

The Author is pursuing a master’s degree in Comparative International Relations at Ca’ Foscari University, Venice, Italy. She is also an exchange student at the Graduate Institute of International Politics, National Chung Hsing University. Her research interests include the People’s Republic of China’s domestic and foreign policies and International Relations (with a focus on East and Southeast Asia).

References


[1] The World Bank. (2022). The World Bank Data on Bangladesh. Retrieved from The World Bank: https://data.worldbank.org/country/bangladesh

[2] Anwar, A. (2022). Positioning the Bay of Bengal in the Great Game of the Indo-Pacific Fulcrum. Journal of Indo-Pacific Affairs. Retrieved from https://www.airuniversity.af.edu/JIPA/Display/Article/2980896/positioning-the-bay-of-bengal-in-the-great-game-of-the-indo-pacific-fulcrum/

[3] Ferdous, J., & Islam, M. (2020). Politics and Possibilities of Deep Sea Port in Bangladesh: A Special Focus on Matarbari Port Project. International Journal of Research and Scientific Innovation, VII(X).

[4] Ramachandran, S. (2020). Bangladesh Buries the Sonadia Deep-Sea Port Project. Retrieved from The Diplomat: https://thediplomat.com/2020/10/bangladesh-buries-the-sonadia-deep-sea-port-project/

[5] Ferdous, J., & Islam, M. (2020). Politics and Possibilities of Deep Sea Port in Bangladesh: A Special Focus on Matarbari Port Project. International Journal of Research and Scientific Innovation, VII(X).

[6] Ramachandran, S. (2016). China’s Sinking Port Plans in Bangladesh. China Brief, 16(10). Retrieved from https://jamestown.org/program/chinas-sinking-port-plans-in-bangladesh/

[7] Shepard, W. (2016). Bangladesh’s Deep Sea Port Problem. Retrieved from The Diplomat: https://thediplomat.com/2016/06/bangladeshs-deep-sea-port-problem/

[8] Ramachandran, S. (2020). Bangladesh Buries the Sonadia Deep-Sea Port Project. Retrieved from The Diplomat: https://thediplomat.com/2020/10/bangladesh-buries-the-sonadia-deep-sea-port-project/

[9] Byron, R. K. (2020). Plans for a deep seaport at Sonadia nixed. Retrieved from The Daily Star: https://www.thedailystar.net/business/news/plans-deep-seaport-sonadia-nixed-1953857

[10] Ramachandran, S. (2020). Bangladesh Buries the Sonadia Deep-Sea Port Project. Retrieved from The Diplomat: https://thediplomat.com/2020/10/bangladesh-buries-the-sonadia-deep-sea-port-project/

[11] Ramachandran, S. (2016). China’s Sinking Port Plans in Bangladesh. China Brief, 16(10). Retrieved from https://jamestown.org/program/chinas-sinking-port-plans-in-bangladesh/

[12] Hossain, D., & Islam, M. (2021). Understanding Bangladesh’s relations with India and China: dilemmas and responses. Journal of the Indian Ocean Region, 17(1).

[13] Ramachandran, S. (2019). How Bangladesh Learned to Love the Belt and Road. Retrieved from The Diplomat: https://thediplomat.com./2019/07/how-bangladesh-learned-to-love-the-belt-and-road/

[14] Chakma, B. (2019). The BRI and Sino-Indian Geo-Economic Competition in Bangladesh: Coping Strategy of a Small State. Strategic Analysis, 43(3).

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