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    Regional Connectivity: Bangladesh’s Trump Card

    Kashif Choudhury

    The year is 1688. Captain Charles McDowell is examining the battleships stationed at the port 2 miles inland, sweat pouring down his face from the beating sun. He is trying to contemplate strategies on winning this crucial port for Mother England in order to allow his East India Company to trade more freely in spices and silk from India.

    The port he was looking at more than 300 years ago was modern day Chittagong; which was at the hands of the Portuguese during that time, who had a strong grasp on the Indian subcontinent, with major commercial ports in Goa, Bombay… And Chittagong. This proves that the geostrategic attractiveness of the port city of Bangladesh as a major regional trade corridor is not a 21st century phenomenon. The Europeans were fighting over it from before there was a United States of America.

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    Today in the 2010s, the battle for the use of Bangladesh’s oceanic gift is waging again. But this time, instead of wooden ships, primitive cannons and colonizers, the fight is being waged in the diplomatic corridors of Asia’s biggest superpowers, with dialogue. So what does the modern day conquest for trade look like?

    Today, Asia is the least connected continent, which hinders commerce to benefit from scales that only international trade provides.  Intra-regional trade accounts for a fraction of the trade when compared to their global volume. Intra-regional trade between IMT (India-Myanmar-Thailand) countries for instance was only USD 41 Billion, which is only 3.3% of the total trade of these countries.

    The big superpowers of Asia have realized this weakness as far back as the 1950s, when ESCAP (Economic and Social Commission for Asia and the Pacific) of the UN envisioned the Asian Highway. The dream was that Asian countries would upgrade their existing road infrastructure, connect to neighbors and build the largest road network in the world.

    From its inception, were fast developments up till the mid-1970s at which point progress stalled. Globalization reawakened it again in the early 1990s. Also, because of the varying circumstances of countries involved, it was decided that ADB would provide the funding required to those who needed it.

    However, the geostrategic landscape of the world had changed dramatically from the 1950s. Now, Asia has countries who are counted among the elite in terms of economic, and even military might. So, competing road networks have sprung up in order to build corridors between neighbors to boost trade. Among them are the Bangladesh-China-India-Myanmar (BCIM) corridor, Bangladesh-Bhutan-India-Nepal (BBIN) corridor and the corridor that may connect one third of the world ′s population – the India- Myanmar-China (IMT) corridor.

    This brings us to Bangladesh. The tiny country home to 160 million people; to put it into perspective, Bangladesh is the largest, smallest country in the world. Meaning, there is not a smaller country in the world, holding as many people. In a recent report, PwC predicted that Bangladesh may become the 23rd biggest economy in the world by 2050 if it maintains a compound annual growth rate of 7%.

    What is needed for Bangladesh

    In order to make this dream a reality, Bangladesh needs to overhaul its infrastructure in a few key areas, illustrated below.

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    Firstly, it has to overhaul its highways, more than 600 km of which currently have one lane. The government has already set out a budget of USD 504 million for the feasibility study required before the start of overhauling.

    Secondly, highway patrols are needed to be beefed up in order to prevent untoward incidents from happening, because of the international traffic flowing through the roads. At present, this number stands at 1 policeman/12 kilometers throughout the 11,806 kilometers of roadway piercing through the heart of the country; that too with bare bones logistics and capability.

    Thirdly, the visa process for vehicles, consignments as well as individuals have to be streamlined and digitized to ensure vehicles coming through the borders are accounted and controlled for.

    Fourth, laws have to be harmonized with the Asian Highway and other authorities to mitigate discrepancies and deal with the myriad of incidents that may occur. Also, all incoming vehicles have to be updated on the relevant rules and regulations the moment they set out on the roads of the country.

    Lastly, ports, including Chittagong, Mongla, Paira have to be upgraded to attract business from neighboring countries. The largest port in Bangladesh, the Chittagong port handled a record 2 million containers (TEUs) in 2015, which is almost half of that handled by the busiest port in the region, Jawaharlal Nehru port in Mumbai, which handled 4.46 million TEUs in 2014-15. However, problems remain as the Chittagong port can still only handle 40,000 TEUs at a time. So, capacity expansion capability will remain limited unless substantial investments are made.

    If Bangladesh manages to properly co-ordinate and execute the changes necessary to allow a regional corridor to pass through it, its geopolitical position will improve dramatically and bring in billions in revenue for the government. More than that, expansion of trade boundaries will also mean an expansion in the scope and breadth of thought for Bangladeshis. It will allow them to think bigger and dream farther, intangibly but certainly increasing the human capital of the country and helping it to become the 23rd largest economy by the year 2050 (Source: PwC). 

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    Note: The situation depicted in the opening paragraph is set in a fictional, yet historically accurate context. 

    Kashif is an Assistant Vice President at LightCastle Partners and is a Research Associate at the Green Banking Project funded by the World Bank. He completed Honors in Economics with a Dual Major in Finance from North South University and is currently doing MS in Economics. His love for Economics is matched only by his passion for technology and he is always looking for areas where these two fields merge. He can be reached at [email protected]

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    • Bijon Islam

      Good Read 🙂 like the story based writing style

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