Dhaka secures $1 bn Russian arms deal
Asia Times – 19/01/2013 – por Syed Tashfin Chowdhury
DHAKA – A US$1 billion loan deal under which Bangladesh will procure Russian military equipment and arms has prompted questions in Bangladesh over the timing of this and and other agreements reached last week, and whether the arms deal will undermine ties with the United States.
Experts also questioned the need for the first nuclear power plant in Bangladesh, to be constructed in Rooppur, in the northwest of the country, for which Russia has also assigned $500 million.
The deals between Moscow and Dhaka were signed on January 15 during a three-day visit to Russia by Bangladesh’s Prime Minister Sheikh Hasina. The signing ceremony at the Kremlin was witnessed by both Hasina and Russian President Vladimir Putin. Two other agreements and six memoranda of understanding on cooperation in various fields, including agriculture, public health, medical science, education, counter-terrorism, culture, law, justice and parliamentary affairs, were also signed.
“This seems like an attempt to seal the deal with the elections ahead,” Dr Zaid Bakht, research director of the Bangladesh Institute of Development Studies (BIDS) told Asia Times Online. Parliamentary elections are due around the end of this year.
Terming the loan as an intention from both countries to “expand military and technological cooperation”, Putin was quoted by news agencies as saying following the signing ceremony that “Russia will extend Bangladesh a credit of $1 billion, which will be spent on the purchase on Russian weapons and military technology”.
Under the agreement, the world’s second-largest arms-seller will provide air defense systems and Mi-17 transport helicopters, armored vehicles and infantry weapons, a source close to Russia’s state arms export agency told the Vedomosti business daily.
Bangladesh has been expanding its defense capabilities, building a new air base close to neighboring Myanmar and adding frigates to its navy, AFP reported.
Imtiaz Ahmed, an international relations expert and professor in the same field at the University of Dhaka, rejected concerns that the arms deal will undermine ties with the US, emphasizing instead the importance of not alienating neighbor India, which also has close ties with Russia.
Talking on the January 16 episode of Tritiyo Matra, a popular television talk show in Bangladesh, he said: “The ideologies of the 1970s are no longer there. Russia has been selling weapons to a number of US friends like South Korea, the United Arab Emirates, Malaysia and others.
“I believe Russia is the only country that was ready to provide such a loan to Bangladesh. China would have been an alternative, but buying weapons from China would have resulted in adverse vibes from India, which is one of Bangladesh’s closest friends in recent times.”
However, Ahmed urged that the terms and conditions of the loan be made public for further assessment.
Other guests, who included an international relations expert and a member of the opposition, questioned the necessity of the $1 billion loan at a time when Bangladesh has increased its fuel tariff for the seventh time during this government’s tenure in order to “lower subsidies”.
As a part of the wider cooperation, Russia is to set aside $500 million to finance the construction of Bangladesh’s first 2,000-MW nuclear power plant, Hasina said at a joint press briefing after the signing ceremony. She added that Russian technical and financial support in the project is “a shining example of our deeper engagement”.
On the nuclear power plant financing and support, Bakht told AToL: “Whether the technology and the costs included are feasible for Bangladesh, this project needed to be evaluated by Bangladesh before signing this deal.”
He pointed out that although Russia has a number of nuclear power plants, “they have suffered numerous problems in some of them”. Bangladesh also should have expanded its alternative sources of power before going for nuclear power, he said.
Bangladesh’s industrial sector has been hit by power shortages over the past five years, worsening each summer. Only around 3,796 megawatts were generated last summer against a total demand for electricity of around 5,100 MW, leading to a shortage of 1,304 MW, according to the Power Grid Company of Bangladesh.
Hasina said the preparatory work on the nuclear power plant “will now allow us to make arrangements for the establishment of the plant”. After she returned to Dhaka on January 17, it was reported in local newspapers that work on the Rooppur nuclear power plant will begin this year.
Besides the nuclear power cooperation, Putin said Russia is expanding ties with Bangladesh in the broader energy sector, as Russia’s Gazprom last year signed a contract with Bangladesh’s state-owned Petrobangla to drill 10 gas wells, which will “increase gas production in Bangladesh to 56 million cubic meters of gas per day”.
Hasina said the various agreements signed during her visit “will place our relationship on a firm footing and help in taking practical initiatives in the future”.
During her trip, Hasina asked Putin to consider duty-free access of Bangladeshi products into Russia. Putin told the press that trade between the two countries has grown to more than $700 million a year, and “we are placing emphasis to reach $1 billion”.
Hasina’s visit to Moscow is the second by any Bangladeshi prime minister. The first was made by Hasina’s father, Bangabandhu Sheikh Mujibur Rahman, in March 1972, at the time of the Soviet Union, under the invitation of Leonid Brezhnev. Russia had provided support to Bangladeshi liberation war forces during and after the liberation war of 1971, she recalled during her visit.
Syed Tashfin Chowdhury is the Editor of Xtra, the weekend magazine of New Age, in Bangladesh.