30.10.2023 Feature Article

BRI enters a new phase: Opens up growth opportunities in Bangladesh

BRI enters a new phase: Opens up growth opportunities in Bangladesh
30.10.2023 LISTEN

The third Belt and Road Forum for International Cooperation held on October 17-18, in Beijing, under the theme ‘‘High-quality Belt and Road Cooperation: Together for Common Development and Prosperity,’’ brought together various representations of countries and international organizations around the world. In a keynote speech delivered by President Xi Jinping at the opening ceremony of the Forum, he indicated that over the past 10 years the Belt and Road Initiative (BRI) has progressed from ‘‘sketching the outline’’ to ‘‘filling in the details’’ and blueprints have been turned into real projects – extending from the Eurasian continent to Africa and Latin America and establishing cooperation with more than 150 countries and over 30 international organizations.

To further unlock high-quality growth along the belt and road, President Xi Jinping revealed that China will take 8 major steps including US$47.8 billion financing pledge from Chinese development banks, a push for green development, a silk road e-commerce zone with more free trade agreements and investment treaties, advance scientific and technological innovation, promote more cultural and people-to-people exchanges and a logistics corridor across Europe and Asia. For BRI participating countries such as Bangladesh, China’s new Action Plan will further promote technology transfer and capacity-building, enhance digital connectivity, advance green development and expand fiscal space among others – this will open up new growth opportunities across various industries that will ultimately enable Bangladesh to achieve its development goals.

In 2016 Bangladesh became the first South Asian country to establish partnership with China under the Belt and Road Initiative (BRI). Over the past 7 years, the BRI cooperation has generated concrete results – Bangladesh has witnessed massive infrastructure footprints and enhanced cultural and social exchanges, contributing significantly to the country’s development. A recent report released in September 2023 by the Chinese Embassy in Bangladesh titled ‘‘The Belt and Road in Bangladesh Achievements and Way Forward’’ estimates that BRI will spur the South Asian country’s real GDP growth by at least 2.1 percent, create additional 1.8 million to 3.6 million employment opportunities and alleviate extreme poverty by 1.3 percent – in fact, these essential socio-economic gains are enabling Bangladesh to achieve set goals under The Vision 2041, the country’s plan to eliminate extreme poverty and reach Upper Middle-Income Country status by 2031 and High-Income Country status by 2041.

According to the World Bank, for Bangladesh to achieve its vision of attaining Upper Middle-Income status by 2031, the South Asian country has to foster job creation through a competitive business environment, increase human capital and build a skilled labor force, develop efficient infrastructure, address vulnerability to climate change, diversify exports beyond ready-made garments sector and establish policy environment that attracts private investments. To enable Bangladesh realize these goals, over the last 7 years, China, under the BRI cooperation has extended massive and consistent support to the South Asian country and the new Action Plan announced by President Xi Jinping will bring additional opportunities to Bangladesh.

For example, to address energy outages, a decades-long impediment to industrial and business growth in Bangladesh, that also obstructs poverty alleviation efforts, China under the BRI cooperation, does not only support the country to scale up energy production to meet growing demand but assists Bangladesh to secure sustainable energy sources – making available green and affordable energy across the country. For example, the recently inaugurated Cox’s Bazar wind power project, a flagship initiative invested by Wuling Power Corp. and built by PowerChina Chengdu is a major milestone in Bangladesh’s pursuit for clean and sustainable energy – upon operation, the project will provide Bangladesh with about 145 million kWh of clean electricity per year, reduce coal consumption by 44,600 metric tons , cut carbon dioxide by 109,200 metric tons and also meet the electricity demand of 100,000 households. Clearly, green energy cooperation with China, the global leader in this field, under the BRI has paved the way for Bangladesh to access opportunities needed to enhance its clean energy production capacity.

So in the case of Bangladesh, the new Action Plan, which mentions green development as one of the eight major steps to support the joint pursuit of high-quality BRI cooperation, will certainly expand the South Asian country’s toolkit to achieve set goals in green development. In fact, as announced by President Xi Jinping, the plan to further deepen cooperation in areas such as green energy, green infrastructure, green transportation and also set up support for the BRI International Green Development Coalition will provide developing countries such as Bangladesh with additional resources through technology transfer, capacity-building and finance. Also by implementing the Green Investment Principles for the Belt and Road, together with providing 100,000 training opportunities for partner countries by 2030, China will play a central role in creating green jobs, driving inclusive growth and accelerating clean energy transition in Bangladesh.

This effort is crucial to realizing the country’s set goals in this field including fulfilling the commitment made by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) when it signed the United Nations fashion industry charter as a supporting organization to achieve 30 percent reduction in GHG emissions of the industry by 2030. Considering that ready-made garments is the mainstay of the economy accounting for about 81.16 percent of Bangladesh’s total exports in 2021, enhanced green development cooperation with China together with engagements in other fields such as scientific and technological innovation, trade agreements and investments under the BRI will enable Bangladesh to meet global clients’ strict environmental, social and governance (ESG) requirements, which will safeguard the colossal revenue from a sector that is indispensable to achieving The Vision 2041.

Alexander Ayertey Odonkor is a global economist with keen interest in the social, environmental and economic landscape of both developing and developed countries, particularly in Asia, Africa and Europe. He is a columnist for the China Global Television Network (CGTN), The Brussels Times, China Daily, The Diplomat, Business and Financial Times and several others. He holds a master’s degree in Finance and a bachelor’s degree in Economics and Finance, together with a comprehensive postgraduate education, spanning entrepreneurship, environmental and social management, mining, risk management, electronic trading, and business management pursued at Harvard University, Massachusetts Institute of Technology, Curtin University, University of Adelaide, New York Institute of Finance and Delft University of Technology, respectively.