Dr. Richard Benkin
Originally published in the Daily Asian Age of Dhaka
https://dailyasianage.com/news/288147/implications-of-bangladesh-joining-the-china-russia-axis
As a westerner, I need someone to explain something to me. Bangladesh is a country that study after authoritative study finds to be among the most faithful to Islam of all countries worldwide; that Bangladeshi Muslims are among the most religiously conservative in the world, and that fundamentalism has an ever strong hold on a significant portion of the population. [Please take note: fundamentalism is NOT the same thing as radicalism; it denotes a form of religious practice that does not have to include non-religious elements.] It takes strong positions on issues it ties to Islam from Israel to Ayodhya and Rohingyas; but remains silent about anti-Muslim genocide. So someone has to tell me how that country-whose constitution begins with the word Bismillah-can keep getting close to another country, China, that is committing genocide against its Uighur Muslim population, and does so without a word of objection to these heinous actions. And it's not just the government: the people themselves have not spoken up about it either. I asked that question in Dhaka three years ago. I got no answer to it then, and still get none. What are people scared of saying when their actions already say the things they fear to be tagged with the most?
Even if Bangladeshi leaders were not mortgaging their people's future to such a hateful country, what they're doing is still a bad idea. In 2018 and 2019, several international think tanks, including that of the Asian Age ("Debt Trap Diplomacy and Regional Threat") all predicted dire consequences for small nations involved with China's Belt & Road Initiative (BRI). They also cautioned Bangladesh about moving forward with the embrace of China that some in the government were urging. Chinese debt trap can move things in the wrong direction in a hurry, and the predictions of a few years ago already are coming true despite the turmoil caused by COVID and the consequent disruptions of the global economy,
We already are seeing the wreckage of nations victimized by China through Belt & Road. Sri Lanka ceded effective control of its strategic Hambantota port. But that is just the most notorious example. Djibouti's experience is no better. Like Sri Lanka, it sits on a very strategic location; and that is what explains China's special interest in the small nation on the Horn of Africa. It, too, has had to cede assets, and the Chinese now control its Doraleh Container Terminal. In the Balkans, China has informed the country of Montenegro that it will have to give up territory and assets since it cannot meet its debt trap payment. When the Chinese loans started rolling into the country, several self-interested persons lined their pockets with it, and then hired a Chinese company to build a still unfinished highway that Montenegrins still a "road to nowhere." Laos, as a result of its borrowing, is turning into one giant Chinese military base. Tajikistan was forced to "settle" a land dispute with China and cede 1,158 square kilometers of its territory in exchange for debt relief. And the list goes on and on. Like Laos, Tajikistan now hosts Chinese military bases, like the one in Badakhshan Autonomous Province it began building secretly in 2017, and which United States operatives discovered just before the pandemic. Unlike Laos, Tajikistan has another role to play. Its bases border China's Xinjiang Province where Uighur Muslims are being forced into high tech concentration camps.
But we do not have to travel around the world to see Chinese debt trap victims. There are plenty of examples in South Asia. Pakistan was the first country in the region to sacrifice its sovereignty for loans billed as being for infrastructure. Even as Pakistan became less able to repay those loans, the Chinese-Pakistan Economic Corridor remained BRI's centerpiece. Chinese military vessels started showing up at Gwadar Port, at first episodically and then regularly. Moreover, the Pakistani government needed an increasingly heavy hand to force these projects onto the people. In doing so, however, land use and resources that should have gone to benefit the people of different regions only exacerbated insurgencies by Pashtun, Baloch, and Sindhi minorities. It also appears that Chinese strategy requires more from Sri Lanka than only Hambantota. Sri Lanka is again looking at loan default and is waiting for the next Chinese demand in lieu of payment-another tactic of its debt trap diplomacy: only giving partial relief in exchange for assets, knowing that nothing is changing to generate income and repay the loan. So China gets to grab another strategic asset. Even the tiny nation of Maldives has failed to escape China's clutches, as former President Mohammad Nasheed lamented, "Without firing a single shot, China has grabbed more land than the East India Company at the height of the 19th century… This land grab exercise hollows out our sovereignty."
Almost every credible analyst criticizes Chinese BRI and other lending as suspicious because it is not transparent. That's pretty important. In the United States and other developed countries, we have laws requiring lenders to show borrowers every aspect of their loans, including consequences and remedies for late or non-payment. Lack of transparency allows lenders to take advantage of borrowers by hiding draconian consequences like accelerated interest rates or venues outside the courts, or in the case of BRI debt trap lending, of asset seizure by the Chinese. Loans that lack transparency are predatory, and these Chinese loans have proven to be just that. Most lending nations share these loan provisions through the Paris Club. Significantly, the Paris Club is committed to collective action to help debtor nations repay their loans without being forced by bigger powers to do the very things China has forced small countries to do in furtherance of their geopolitical aspirations. It is not surprising then that China has rejected membership in the Paris Club, at least in part so it can demand the things it does to small country borrowers. Its secretive loans also open the door for massive corruption of the sort we have seen in Montenegro and other BRI borrowers in trouble. Do Bangladeshis consider their country free of corruption? According to the BBC, Chinese lending targets lower and middle-income countries, the ones least able to repay, located in strategic locations. "It is often kept off government balance sheets, directed to state-owned companies and banks, joint ventures or private institutions, rather than directly from government to government."
Interest rates tend to be higher and repayment periods shorter than those from western countries, and because so much of it is "off the books," actual debt can be difficult for borrowers to discern until it's too late. AidData, a research lab focused on development and lending and often positive toward China, estimates that this has led to these small nations owing China more than ten percent of its GDP; for Djibouti, Laos, Zambia and Kyrgyzstan, it's over 20 percent. Sometimes unseen until it's too late, this dependence gives China leverage over those nations and kicks in provisions that allow it to seize assets when countries cannot make loan payments, something rarely seen in loans by western lenders. That tips us off to China's real intentions and why non-payment is preferable to re-payment. Every bank, large and small, has software and a process to try and assure that borrowers will be able to repay money lent, but China never used these available technologies. Rather, they embraced poorer countries that came to them hoping to modernize and gave them the predatory loans that forced borrowers to cede strategic assets; part of an ongoing effort by China to supplant United States influence with their own; an authoritarian one for a democratic one.
Even before Russian President Vladimir Putin's brutal invasion of his Ukrainian neighbor, American officials began seeing the geopolitical implications of BRI. When Putin and Chinese President Xi Jinping advertised their partnership at China's Olympic Games, it only heightened the concern of many western policy makers who drew a straight line between Russia's ambitions in Ukraine and China's in Taiwan. Fortunately, the China-Russia axis got almost everything wrong. It expected Ukrainian defense to fall away tattered-but it remained strong and pushed back the Russians. It expected western resolve to be lacking-but the West united and its willingness to fight stiffened. Even normally neutral European countries like Sweden and Finland, have asked to join NATO, ignoring Putin's threats if they did. If Putin ever did hope to reconstitute the Soviet Union (his piece of this strategic fantasy), his Ukrainian gambit killed it and embarrassed him before his Chinese masters. Attempts to create a financial system to replace the US dominated SWIFT system similarly has fallen flat, and it was supposed to be a key part of their geopolitical strategy; even if a few countries like Bangladesh helped Putin evade some sanctions with a currency swap; which brings us back to what this means for Bangladesh.
Increasing numbers of US lawmakers recognize this attempt by China to replace the US for what it is. Bangladesh's currency swap with Russia, BRI loans with China, deepening ties with China, and continued trade with Russia have come to the attention of many in Washington. This includes several influential United States Senators who have told me that they expect to review our relationship with Bangladesh in light of who it seems to be choosing as its long term allies. Until now, any action has been held in abeyance because of more pressing concerns: a pandemic, a war, global economic disruption. But expect that to change especially if the November midterm elections show through Americans' votes that Americans want a more self-interested foreign policy.
Why should Bangladeshi leaders care? After all, Bangladesh is a sovereign nation whose leaders do what they perceive to be in the best interests of their country and their people. Bangladesh's involvement in China's Belt & Road Initiative, however, does not serve the people's interests and is actually detrimental to them. Although development has begun to slow and inflation has started to tick up, according to World Bank figures, Bangladesh experienced something of an economic miracle in the years before COVID. GDP growth rates were 7.1, 7.3, 7.9, and 8.2 percent in 2016 to 2019, respectively. It even grew by 3.5 percent in 2020, while the GDP of most large economies declined, including the US (-3.4) and India (-7.3). Recent analyses, however, have gone beyond the pre-pandemic growth to issue a start warning: Despite Bangladesh's impressive economic growth, the economy remains inordinately dependent on one sector: garment exports, which accounts for 84 percent of its exports. These concerns get even more alarming.
That means that all that has to happen is for a major importer of Bangladeshi garments to stop or slow these purchases, and it will turn that economic miracle into a nightmare. And Bangladesh's tilt toward China has not gone unnoticed in the capitals of those countries whose citizens support Bangladesh's economic growth with their purchases; especially the United States. Whereas a few western democracies account for more than half of that market, China and Russia together don't even crack one twentieth of it. Simply put, the United States is Bangladesh's best customer for its garments; China is its biggest competitor. Ask any business owner who they would be concerned about keeping happy.
Thus far, that has not happened, but interest in looking at it grows regularly. Sometimes, they ask me about Bangladesh's persecution of Hindus; sometimes, about its increased radicalization. Most recently, it has been about Bangladesh's use of blasphemy laws for repression and social control. Underlying all of it, however, is the perception that Bangladesh is leaving US orbit and becoming more a part of China's.
Bangladesh has been more circumspect than other countries in approving or refusing Chinese loans. Can it remain so, or will it succumb to the seduction of Chinese money? In addition to the possible loss of critical markets, that path is strewn with other consequences. The Chinese have shown themselves to be expansive and imperialistic. BRI seizures are only their latest device supporting that. It still occupies parts of India (Arunachal Pradesh with its vast hydroelectric resources), Kashmir (Aksai Chin), Tibet, Hong Kong, Macao, and now Taiwan. What strategic asset Bangladesh might it try to snatch? And if all of that was not enough to dissuade prudent leaders from joining with China, we read this from another western think tank: "if China is to protect its strategic interests in Eurasia, it may be compelled to increase its military presence as well."
Dr Richard L Benkin is an American scholar and geopolitical expert.