Bangladesh is at a geo-political crossroads, with its geo-economics becoming a critical conduit between the West and the East. Due to its demography, international trade, and strategic stability, the country has become a significant developing market economy. It is the second-largest economy in South Asia, contributing to collective growth and development, 33rd largest in the world in nominal terms, and 25th most significant in terms of purchasing power parity.
The country offers vast potential for investment in its territory along with the Bay of Bengal, which is now a core feature of Indo-Pacific power politics. Despite constant armed provocations from Myanmar, the country shows the highest restraint and yet hosts 1.1 million Rohingya refugees of Myanmar origin.
Bangladesh’s growth prospects and strategic stability have attracted global attention, making it an emerging power in the Bay of Bengal and the South Asian region. However, Bangladesh is pursuing a “balancing act” between the Western powers and its Eastern neighbours to sustain the growth momentum. The West remains the key destination of exports for Bangladesh, while imports and trade with the Eastern countries are critical for Bangladesh. In this balancing act, Japan is placed as a prime country of foreign policy focus for Bangladesh. Prime Minister Sheikh Hasina visited Tokyo in April 2023 for the sixth time as Prime Minister at the invitation of her counterpart, Fumio Kishida.
The visit marks an extraordinary milestone between these two countries as both countries committed to working together to strengthen rules-based free and open Indo-Pacific and jointly cooperate on security and safe use of the sea. The issue of regional and international peace, stability, and prosperity was a significant focus of mutual interests. Both prime ministers highlighted the need for defense cooperation between Bangladesh's armed forces and Japan's Self-Defense Forces, particularly the Japan Maritime Self-Defense Force. The cooperation has been directed toward capacity building, exchange of expertise, defense equipment, and technology transfer.
In its effort to keep the Indo-Pacific region stable and secure, the Japanese government has declared the Official Security Assistance to provide defense aid to four countries -- Bangladesh, Malaysia, Philippines, and Fiji. The bilateral defense cooperation under OSA compliments the defense architecture and framework of Bangladesh Armed Forces’ Forces Goal 2030. While the defense cooperation is crucial for Bangladesh to keep its borders secure and protect its maritime interests intrinsically linked with economic growth and development, the visit has opened doors for new economic cooperation that can have a positive spillover effect on the impoverished regions in Bangladesh’s neighborhood.
The impressive progress of the Japanese-supported Bay of Bengal Industrial Growth Belt (BIG-B) initiative in Cox’s Bazar serves as a role model of development cooperation that can stabilize the Rakhine province of Myanmar and help the Indian Northeast to gain economic benefits in the coming year. The Moheshkhali-Matarbari Integrated Development Initiative is another crucial agenda Bangladesh-Japan can deliver as a practically viable development model. Bangladesh seeks to connect its economy with Southeast Asia, making it a connectivity hub between South and Southeast Asia with the support of Japanese investment in infrastructure.
To make these efforts even more fruitful, increased participation of Japanese firms in agro-business, fisheries, skills development, automobile and shipping, manufacturing and service sectors, environmental services, and technology should be encouraged. There is no doubt that Bangladesh’s image in the Japanese policy and corporate communities is improving; both countries are required to bolster people-to-people exchange, media cooperation, and exchanges between public-private sectors.
Bangladesh duly recognizes the contribution of the Japan International Cooperation Agency (JICA) as its largest development partner. JICA has provided $22 billion as Official Development Assistance（ODA）Yen Loan (ODA) to Bangladesh as of November 2023, along with $965 million as grants, technical assistance worth $699 million, and $166 million to develop the private sector. The benefits of such support have significantly improved Bangladesh’s progress pathways, economic resilience, and social inclusivity. These supports have created social capital and economic spaces to convert aid support into trade support to sustain Bangladesh’s growth momentum. Hence, both countries should now work together to strengthen Bangladesh’s trade regimes by making economic institutions more accountable, transparent, and inclusive.
The strengthening of trade regimes, along with the defense and connectivity sectors, will require greater bilateral diplomatic cooperation and political communication. One must not forget that Bangladesh’s quest for strategic autonomy would require a deeper understanding of Bangladesh’s geo-political realities. Bangladesh’s strategic needs and economic interdependence with major powers should not be seen through the prisms of any third country or alliance politics. Rather, it should be considered a unique strategic and economic partnership that can always help keep the Indo-Pacific free from over-militarization, minilateralism, and Cold War syndromes.
After all, the Bay of Bengal’s importance as the middle sea cannot be ignored.
That means the new era of bilateral relations between Bangladesh and Japan should be geared towards creative diplomacy, peaceful strategic objectives, and private sector confidence-building measures. A summit-level meeting between Bangladesh and Japan in 2024, civil society-to-civil-society collaboration, media-to-media partnership, and regular meetings among the business chambers should be encouraged to deepen the ties.
The deepening of the multifaceted ties will reduce pressure on Bangladesh to choose sides amid geo-political rivalries yet help lift economic ties with the power centers across the international power centers. This will undoubtedly be of win-win interests for both Bangladesh and Japan.
Professor Shahab Enam Khan is Executive Director, Bangladesh Centre for Indo-Pacific Affairs, Jahangirnagar University.