Tiger in the night

Oct 15th 2016 | DHAKA | THE ECONOMIST

THE last time a Chinese president visited Bangladesh, back in 1986, things were rather different. For one thing, he did not carry $40 billion in his pocket. This is the sum that government sources say Xi Jinping, China’s current leader, is bringing for a day-long stopover on October 14th, on his way to a summit of big developing countries in the Indian resort of Goa. Admittedly, the windfall will come in the form of loans for some 21 infrastructure projects including elevated expressways, railroads, bridges and power plants. But it is welcome all the same. 

Bangladesh, too, has changed a lot in 30 years. Even if its 160m people remain mostly poor, the country can no longer be dismissed as “the armpit of India”. Its GDP is growing by 7% a year, as fast as China’s, and by some social indicators it has overtaken its giant neighbour India. With a booming garment industry that now ranks second only to China’s in exports, plus some 10m diligent overseas workers sending money home, Bangladesh has enjoyed current-account surpluses for all but one of the past ten years.

BNP Chairperson and ex-PM Begum Zia meets with the Chinese president Xi Jinping at Dhaka’s Le Meridien Hotel Oct 14 evening.

It helps that Bangladesh has other suitors just now. Japan recently gazumped China’s offer to build a new seaport, with a $6.7 billion project that includes a liquefied-natural-gas terminal and four coal-fired power plants. In July Russia promised $11.4 billion in loans towards a pair of nuclear reactors. Earlier this year India, which is already supplying Bangladesh with power from its grid, agreed to finance another big coal-fired power plant to the tune of $1.5 billion. Multilateral institutions such as the Asian Development Bank and World Bank have also upped their aid.

This is not to say that Sheikh Hasina, the prime minister, will be deaf to China’s overtures. Despite its recent rude health, Bangladesh’s economy still needs all the help it can get. As even the briefest exposure to Dhaka’s cacophonous parade of tinkling cycle rickshaws, tooting three-wheelers and honking SUVs reveals, this is a country of bottlenecks.

Traffic relief for the capital city’s 17m people—who, the UN predicts, will number 27m by 2030—will not come soon. There are no plans at present for any mass-transit system, and the first of three phases of a cross-city expressway is not due to open until 2018.

By the same token, some 13m Bangladeshi households currently go without electricity. Even with all the added power from aid-funded plants, the country may still face future energy shortages. A recent report from the ADB suggests it will need to triple generating capacity by 2030 to meet expected demand, and warns that it must not only build new plants but replace ageing ones.

Yet perhaps the biggest bottlenecks are not physical but political. Sheikh Hasina’s Awami League party has been in power since 2009, and faces a weakened opposition in the run-up to general elections scheduled for 2019. This does not mean it is popular, however. Most of the opposition boycotted the last national polls in 2014, which took place amid widespread violence and resulted in what is virtually a one-party parliament. While international attention has focused on a string of gory killings by Islamist radicals, culminating in the attack on a posh restaurant in Dhaka in July that left 20 mostly foreign patrons dead, what worries Bangladeshis more is what many perceive as a broader collapse of the rule of law.

Despite considerable turbulence since breaking from Pakistan following a bloody war in 1971, Bangladesh has a tradition of respect for dissent. This has eroded in recent years as the Awami League, which itself had been a victim of previous purges, has turned on its rivals with a vengeance. “The media are controlled, the judiciary is controlled, and the police are even more enthusiastic than their masters,” says Fakhrul Islam Alamgir, the secretary-general of the Bangladesh National Party, the largest opposition group. Aside from extra-judicial killings and disappearances targeting Islamists and other dissidents, the ruling party has instigated a crippling barrage of lawsuits—some 37,000 against the BNP alone. “I spend four days a week attending court hearings, and two hours stuck in traffic for every one,” grumbles Mr Alamgir.

Perhaps, like previous generations of Asian tigers, Bangladesh will endure a spell of autocracy before its politics become more democratic. But in the meantime, as the head of one Dhaka NGO says with a shake of the head, the country is walking a tightrope: “It is a dangerous thing when people have no vehicle to express their unhappiness.”