- Bangladesh rejects Sonadia Port deal with China because of the secret high interests declared by the Chinese Administration.
- China was going to spend on this project but recently Bangladesh has kicked off this project.
- The Chinese government decided to lend $10-14 Billion to Bangladesh for the construction of this project.
The Bangladesh government has officially called off the development of a deep-sea port at Sonadia Island, a move likely to be welcomed by India. https://t.co/5cIfelCUvD
— The Diplomat (@Diplomat_APAC) October 13, 2020
— Indo-Pacific Defense FORUM (@IPDefenseForum) October 13, 2020
As you can see from the above image that just below Chittagong Port, there is the presence of Sonadia Island. Actually, this is not an island, but you can see various divisions of landmass and water over there. That is why it is considered as an Island.
It is quite near to Kaikphyu Dea Sea Port of Myanmar that China has invested already there. These two islands are rich in various minerals and having Natural Gas content in a huge amount.
Why Bangladesh rejects Sonadia Port deal with China?
According to Bangladesh, various economical parameters are arising regarding the Sonadia Port’s construction. The Diplomats of Bangladesh have been motivating towards India and Japan rather than China. The following two reasons of Bangladesh’s rejection of China in terms of investments;
1. The secret interest rate of China;
According to Bangladesh’s diplomats, China is not representing the interest rate to Bangladesh. It is only providing $10-14 Billion without expressing the interest rate.
So, somewhere this may be considered as a debt trap for Bangladesh under China if China would apply a huge interest rate to Bangladesh for Sonadia Port investment.
2. Japan is offering to spend $3.7 Billion to setup Matarbari Port in Bangladesh;
Shamsu Alam, senior secretary of Bangladesh’s Planning Commission, said JICA, the main conduit for Japan’s overseas development aid, had offered $3.7 Billion at an interest rate of 0.1 per cent over 30 years with an initial 10 year grace period to build the $4.6 billion port and power complex in Matarbari.
The Deep Sea Port that Bangladesh is going to build now at Matarbari will proceed with Japenese help like Sonadia, this is located on the Bay of Bengal and close to India.
However, given the strong India-Japan relationships, New Delhi is unlikely to raise objections. Work on the port has already begun. Bangladesh will therefore get its first deep seaport by 2025-but it will be funded and built by Japan, not China.
|Point to be noted;|
Japan’s proposal is affordable and beneficial fo Bangladesh instead of China.
Sonadia Deep-Sea Port Project;
The idea of a deep-sea port at Sonadia was first conceived in 2006. China agreed to construct the port as well as providing loans to finance the project. China wanted this to be part of ” One Belt One Road “.
But the important thing was that China did not tell about the interest rate that Bangladesh had to pay China. While on the other side, China decided that the construction of this Sonadia Deep Sea Port would be led by the Chinese companies and generate the employments in Bangladesh.
China knew that India could not join One Belt One Road and Kolkata port would not be under the control of China. That is why they have decided to make a port in Bangladesh.
One Belt One Road;
It is developed by Chinese President Xi Jimping in 2013 China’s ambitious new foreign and economic policy. It is a development strategy to connect China with Central Asia, Europe and Indo-Pacific countries.
It is comparable with an ancient network of silk road or silk trade routes connecting the east and western countries. The route is famous for the profitable silk and horse trade. That is why it is also called as New Silk Road initiative.
1. One Belt;
It means land-based ” Silk Road Economic Belt “. Its motive is to connect China’s underdeveloped hinterland to Europe through Central Asia.
2. One Road;
It means “ Maritime Silk Road ” and it is to connect the fast-growing South-East Asian region to China’s southern provinces.
Developments like custom coordination, the formation of SEZ, new ports, E-Commerce, trade liberalisation etc.
The economic history of Maritime powers, such as Spain, China, Japam, Britain, Singapore, Portuga and Rotterdam etc, clearly demonstrates the significant and critical role which the deep seaports have played in the development of their economies.
The Existing Port Facilities of Bangladesh;
There is only one port called ” Chittagong Port “, built-in 1887 near the Karnaphuli river. It is 16 km upstream of the Bay of Bengal, Chittagong Port is an integral part of the sub-regional transport and logistics chain. Chittagong port plays a vital role in achieving sustainable economic enhancement by facilitating international trade.
The Bangladeshi and Chinese government were to sign the framework agreement during PM Sheikh Hasina’s visit to Beijing in July 2014, but that did not happen. The cost of the port construction was calculated to be around $14 Billion.
Despite China’s continuing interest in the port project, it didn’t feature on the agenda during President Xi Jimping’s 2016 visit to Bangladesh ( Dhaka ).
China’s Strategy to invest in Bangladesh on Port formation;
There are two main reasons why China has been investing in both Bangladesh and Myanmar.
1. To find out new trade route rather than the South China Sea;
China has been blocked by both India and the United States of America from the South China Sea via the Strait of Malacca because the Naval forces of India and the US are deployed over there to restrict China’s activities.
And now China has two options for trade and that is connected with CPEC project with Pakistan and Sonadia Port with Bangladesh.
This is the main reason, why China has been investing in these countries.
2. To Encircle India with the help of these countries;
As you know that the relationships between India and China have become very worse. Right now, the Indo-China standoff is going on and the constant policy of China against India to encircle it with its own neighbouring countries like Bangladesh, Pakistan and Nepal.
To influence these countries, China has been investing in terms of infrastructural developments over there against India.
According to our Analysis, it has been cleared that China has to invest in the neighbouring countries just to encircle India and retains its trade route. But while on the other side, India is emerging as a diplomatic country by also investing in neighbouring countries. Recently in 2014, India has also decided to prepare a Payra Port in Bangladesh which might be considered as a milestone for both India and Bangladesh.