Russia’s Ukraine War Impacts Bangladesh’s Trade And Development Programs

By Ashis Biswas

In South Asia, size continues to matter, even for countries- never mind diplomacy. Bangladesh has been impacted by the ongoing war in Ukraine, along with India, but the Western response could not have been more contrasting. The US/EU-led bloc of countries have hit out at Bangladesh viciously, while they still assess their options vis-à-vis its bigger neighbour, India.

Only days ago Lithuania had promised to send Bangladesh much needed covid medicines. But after Bangladesh abstained from the UNGA vote that condemned Russia for its ‘aggression’ against Ukraine, the Lithuanian government immediately withdrew its offer which had been warmly greeted by ruling circles in Dhaka. The reason: the failure/reluctance of Bangladesh to name and shame Russia for its anti-Ukrainian offensive.

The nature as well as the manner of carrying out the Lithuanian decision has shocked Bangladesh. Pro-West liberals in Dhaka and other major towns can scarcely believe that a so-called Western democratic country can function in this way –playing politics over emergency medical supplies for people during a pandemic! The lively Dhaka-based mainstream press as well as the social media have predictably taken on Lithuania. Netizens have not spared the bigger countries/powers believed to be behind the none-too-gentle snubbing of a major South Asian country , either

It is common knowledge that relations between successive ruling dispensations in the US and the Awami League-led Bangladesh Government have not been easy in recent years. Western governments as well as their different functioning departments and agencies, never concealed their distaste for what they regarded as ‘controversial’ general elections held in Bangladesh. Adopting an uncompromisingly dismissive approach towards the entire election process, some American officials publicly admitted that they felt ‘more at home’ with opposition politicians, especially those belonging to the Bangladesh Nationalist Party (BNP)!

While naturally the ruling AL was far from pleased, the US stance was hardly more welcome in India. The Delhi-based ruling establishment has never forgotten the BNP’s close ties with the pro-Pakistan Jamat-e-Islami which had opposed the Bangladesh freedom struggle. So had many prominent leaders close to Pakistan, who later joined the BNP or other opposition parties.

‘The US preference for the BNP and similar forces is a clear admission that many Americans are still not comfortable with the break-up of Pakistan. They continue to follow the old anti-Indian Nixon-Kissinger line. The slaughter of innocent millions is no major issue with such people,’ says a Kolkata-based analyst.

However, even without facing what amounts to a Western blackmail over how it votes in the UN General Assembly, Bangladesh, by way of confronting new challenges, has enough on its plate to keep it engaged for some time yet.

In particular, there is immediate general concern over the fate of bilateral projects and arrangements with Russia. The fate of the Rooppur thermal power plant, the proposed Russian nuclear reactors and the bilateral arms purchase agreements are only a few items that have suddenly turned problematic. In view of the most comprehensive economic sanctions announced by the West against Russia, will it now be possible for any work to proceed on these projects/arrangements? It has been made amply clear that countries/regimes continuing to deal with Russia financially will not be spared.

There is as yet no clear answer to the question, because like the shooting war in Ukraine itself, the announcement of Western sanctions is also a never-ending business. There are fresh announcements almost daily, with the US/EU upping the ante against Russia, involving amendments to earlier announcements and so on. Even Western media-based analysts are unsure as to the exact impact of the new sanctions on Russia and its ‘allies’ (Belarus, eg) that may face Western condemnation because of their associations—real or suspected!’ — with Russians.

While this remains vague, Western analysts also insist that the impact of the West’s assault on Russia’s economy would be felt in the ‘long term’, to be spread over an unspecified period of time. This further complicates the situation confronting Bangladeshi — or Indian — policymakers. Should they be looking at short, medium or long term policy options as they face the challenge of effective functioning in a politically divided world, with no previous to guide them?

A city-based observer says, ‘It is early days yet. Meanwhile the Lithuanian move is a clear indication of how far the supposedly ‘liberal’ West is prepared to go against neutral countries in Asia, no matter their size, to drive home their political agenda once and for all. Bangladesh is the third biggest middle income country with a 160 million population in South Asia that other countries cannot simply ignore!’

Some Bangladeshi media analysts fear that there could be more Western arms twisting to follow. Garments exports have been the economic lifeline for India’s eastern neighbor for years. But now that the country will no longer enjoy the concessional tariffs and other exemptions offered by more developed countries because of its middle income earning status, after two or three years, Dhaka-based rulers will find themselves at a crossroads: they must decide which way to go, as the World stands implacably divided into two hostile blocs: Pro-West and non-West.

Naturally there are warnings in the Bangladeshi press as to how over the years the EU and the US have been helpful to the garments producing sector of Bangladesh by continuing their bulk purchases, enabling the country to become number two only to China. Suddenly there is a fear that this could change: while Bangladesh may be a regional powerhouse in the garments business, other countries like India and Viet Nam are not exactly pushovers.

If the Western bloc as a whole turns hostile and buys garments from other countries, the economic development of Bangladesh will face an existential challenge. No wonder in the continuing discourse in the Bangladeshi media over this issue, it is being strongly suggested by some sections that Dhaka should abandon its policy of maintaining a diplomatic equidistance between Russia and Ukraine and fall in line with the West.

Can this be done without offending the Russians who had stood firmly behind Bangladesh and India in the seventies, even challenging the might of the US during the freedom struggle? That is a critically important question Bangladesh cannot ignore either. One correspond writing to a Dhaka-based paper provides a firm answer in the form of a counter question: ‘Where were the US and the EU in the seventies when we were dying to achieve for our freedom?’ Where, indeed.

Dhaka must work out an urgent recalibration of its regional economic priorities, in addition to charting out a more nuanced, delicately balanced foreign policy course to avoid earning the hostility of both camps.

The country is the 5th biggest importer of wheat in Asia. Until recently, it was procuring about 24% of its requirements from India, and 21% or so from Russia. Last year, Bangladesh bought wheat worth nearly $845 million from India, which was 60% of the total imported.

Given the present body of sanctions in force, it is clear that there may be difficulties for Bangladesh to import Russian wheat as before. Chances are it could turn to India to meet any shortfall in this regard. Fortunately, the bigger country’s policy of building up a surplus wheat stock has paid off well and it should not be difficult to meet additional demands.

However, apart from Bangladesh, India also exports wheat to other countries such Sri Lanka, the UAE and the Philippines. Will Indian wheat exports become more Bangladesh –centred than before or will there be enough stocks to ensure that the existing pattern of exports can be maintained without much trouble?

Answers to such questions would have to be worked out in some detail soon, until an immediate truce is achieved between Russia and Ukraine. (IPA Service)

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