Bangladesh signed USD 4.5 billion third line of credit (LoC) agreement with neighboring India mainly for the development of its infrastructure and social sector last October 4, 2017 in Dhaka with the presence of Indian Finance Minister Arun Jaitley and his Bangladeshi counterpart A M A Muhit. Bangladesh has the plan of utilizing this staggering amount, almost 36000 core BDT while one dollar equal to BDT 80, in 17 major projects including electricity, railroads, roads, shipping and ports.
As with previous LoC agreements, Bangladesh will have to pay an interest rate of 1 per cent a year along with a 0.5% commitment fee. It will have 20 years to pay back the loans with a grace period of five years.
It is sounding high from Indian side that such an ample amount of credit loan has never been sanctioned by India for any country which is also among the lowest interest rates for any loan extended by one country to another anywhere in the world. What a great sigh of friendship and love! But is the reality? Is there any monkey business behind such lofty allocation?
In fact, it is a great achievement of India throwing some mere colloquial words sounding sweet before the dim-witted ruling party of Bangladesh willing to continue power with the blind support of India through another one-sided general election like that of 5th January 2014. Unfortunately, other oblivious opposition politicians as well as mass people of Bangladesh know little about this notorious game of India. Even most of the mainstream news media of Bangladesh have little coverage on this vital issue in fear of India and its blessed political party, Bangladesh Awami League (BAL).
Indian benefit from 3rd LoC
However, the issue has been touched a little in a report published by an English National daily of Bangladesh entitle “The Dhaka Tribune”. The report was published on 4th October 2017 with the headline “Bangladesh signs $4.5bn 3rd LOC deal with India”. A few parts of the report are as follows:
“Of the total amount, $1 billion will be used to develop the power evacuation facilities – a system to expel power from the power plant to the national grid immediately after production – of Rooppur nuclear power plant. A significant amount of the loan will also be spent to upgrade 245km of road stretches in three major highways – Benapole-Jessore-Narail-Bhanga, Ramgarh-Baruerhat, and Moynamoti-Brahmanbaria-Sarail – to provide transit facilities to Indian trucks. In addition, the LOC will finance the upgrade of Chittagong and Mongla seaports under the transit and transshipment agreement between the two countries.”
What is the meaning of it? It means that Indian heavy-loaded trucks and other big vehicles will frequently go through some roads and highways of Bangladesh under the Transit Agreement and we will construct all those roads and highways and maintain those with the loans provided by India. But, surprisingly only Bangladesh will have to pay this loan within agreed timeframe and fixed interest as per the deal though the lion benefit of this communication development will be bagged by India. How funny!
Not only that India has direct interest in the same way in all other projects related to the 3rd LoC loan including Rooppur Power Plant and Chittagong and Mongla seaports. Already Bangladeshi media has a huge coverage about the controversial deal with India allowing the neighbor in using the two seaports. Now Bangladesh is going to develop the seaports for better loading and unloading of goods by Indian ships in both seaports. It is also known to all that the incumbent government of Bangladesh, BAL, is excessively subservient to India and has shamefully failed to impose logical transit and transshipment fees on India. Thus we are ironically spending the Indian LoC loan for serving India rather than our own.
Unfair bindings on Bangladesh
Moreover, an unfair and unfriendly binding imposed on Bangladesh by India through dealing of the third LoC loan is that in utilizing of this loan Bangladesh has to purchase 65 to 75 percent services, goods and works from the Indian market. Even, quoting Bangladeshi officials as saying the Indian influential English daily “The Indian Express” focuses this loophole of the loan. The headline of a report of this newspaper dated 4th October (2017) was “Bangladesh, India set to sign $4.5 billion line of credit deal on Arun Jaitley visit”. The report said:
“Officials earlier said Bangladesh would have to purchase 65 to 75 per cent of the services, goods or works from the Indian market with the money to be provided under the third LoC”.
There is also confusion about the necessity of this loan as the implementation ratio of the loans under the previous two LoCs is not satisfactory. The report of the Indian Express also touches the issue. The report stated:
“Some projects under the first and second LoCs were faced with difficulties in the way of their implementation due to limited tendering system within the Indian market. They said some projects under the first LoC of $862 million faced delay in implementation while the physical works of the 14 projects under the second LoC of $2 billion were yet to start. The two countries signed the first LoC in August 2010 while the second one was inked in March, 2016.”
Now the vital questions are- what is the necessity of imposing the burden of such hefty loan on the people of Bangladesh? Is it just for gaining Indian blessings to stay on power by hook or by crook? Is it the spirit of Liberation? Is it the ideology of the ruling BAL who always claims them as the guard of the spirit of 1971?
The Dhaka Tribune report also covers some other aspects of the 3rd LoC contradictory to the interest of Bangladesh but very profitable for India. Just look at the information cited in the report:
“The government will use $500 million to develop and upgrade three economic zones (EZs) in Bangladesh for Indian investors: $100 million to develop special EZ in Mirsarai, Chittagong, $100 million to develop special EZ in Moheshkhali, Cox’s Bazar or Payra, Patuakhali, and $300 million for renovation of several other EZs. Under the third LOC, at least 75% of the procurement for service-oriented projects and 65% for public works projects must be made from India. Funds can be disbursed in 60 months at maximum after the expiration of the tenure set by commercial contracts under the new deal. In the existing agreements, it is 48 months for service sector and 72 months for projects. Waiving of 0.5% commitment charge in the third LoC will be considered by the Indian authority. Under the new LoC, the Exim Bank of India will open a representative office in Dhaka for smooth implementation of the projects.”
In fact, the decision of the 3rd LoC loan was finalized during a four-day state visit of Bangladeshi Prime Minister Sheikh Hasina to India during the second week of last April (2017). The whole Bangladeshi people were waiting for the long-cherished Teesta Water Sharing Agreement with India at that time. But the cunning leaders of the neighboring country very tactfully avoided the mass-demand of Bangladesh and pushed us under the heavy burden of loan. Even, Indian media termed the very logical issue of Teesta treaty as controversial.
Shifting from China
Moreover, Indian motive of shifting Bangladesh’s attention from China was also focused in Indian newspapers. For example, I like to mention a few parts of a report published in the “Hindustan Times” on 8th April 2017 with the headline “India announces $5-billion line of credit to Bangladesh, 22 pacts signed”. The report cited:
“India announced a $5-billion loan to Bangladesh on Saturday and signed bilateral pacts to step up nuclear and defence cooperation between the neighbours, though the contentious Teesta water sharing-deal remained elusive. The line of credit was the biggest offered to any country at one go by India and underlined New Delhi’s efforts to wean away Dhaka from China, the biggest supplier of defence equipment to Bangladesh for many years.”
Defence at dagger
Moreover, another vitiated target of India is to weaken Bangladesh defence sector which was also indicated in the report of the Hindustan Times. The report further said: “Out of the $5 billion credit, $4.5 billion is for infrastructure such as roads, ports, airports and setting up power transmission lines. The other $500 million is for buying defence equipment from India.”
The whole world knows very well that India is not at all in a position to sell defence equipment as they are still depended on other super powers in this regard. So it is very clear that big neighbor India wants to keep Bangladesh in a position thoroughly depended on them in all sectors including economy and defence. It is really a matter of concern for Bangladeshi people that just in the past seven years Indian futile LoCs to Bangladesh stands to $8 billion with little benefit for Bangladesh. Now it is the perfect moment to realize again that considering India as a well wisher of a small Muslim country within the very stomach of it is nothing but living in the heaven of fools. India never considers smooth development and progress in Bangladesh for the sake of their self interest. So there is no alternative of being seriously careful and professional in dealing any agreement with India.
Writer: Journalist, email: email@example.com