As Bangladesh and the European Union celebrate 50 years of diplomatic relations which were built on strong democratic principles and respect for the rule of law, PM Hasina has joined the first-ever Global Gateway Summit in Brussels on European Union President Ursula Von Der Leyen’s invitation.
This is the first edition of the summit where 20 nations have been invited to join. The global gateway summit is seen as a counter to China's Belt and Road Initiative (BRI) as analysts have termed the initiative as the “European version of BRI.”
Prime Minister Sheikh Hasina in her speech has reiterated Bangabandhu Sheikh Mujibur Rahman’s founding principles on Bangladesh’s Foreign policy, “friendship to all, malice to none.” The prime minister, in her speech, has signaled that the relationship between Bangladesh and global superpowers are based on mutual respect, economic cooperation and shared prosperity, and peace. She urged the global leaders to do everything in their power to stop wars and avoid unnecessary arms races and invest the money in education and women empowerment.
The PM’s visit to Brussels for the Global Gateway summit indicates that Bangladesh is looking to balance its funding share for infrastructural development, as the country is looking for alternative financing channels rather than depending on China entirely. Bangladesh is also a member of the Belt and Road initiative, a China-led global infrastructure development strategy.
The Global Gateway Initiative is a worldwide strategy by the European Union to invest in infrastructure projects and establish economic partnerships, based on certain principles. The investment will range in areas like energy transition from fossil fuels to renewables, climate change, healthcare, trade and infrastructure development. The size of the Global gateway fund is approximately 330 billion euros. For the LDCs and developing nations this opens up new funding opportunities in already squeezed funding channels due to economic slowdown in the advanced economies and war.
The European Union has been a long-standing partner of Bangladesh since the latter's struggle for independence. The relationship has steadily increased over the last 50 years. It is also one of Bangladesh’s largest export destinations. On the very first edition of global gateway summit the EU has signed two investment packages with Bangladesh. The first one is a Renewable Energy Package -- more than 400 million euros to boost the green transition in Bangladesh.
The 400m euros announced today between the EU and EIB for renewable energy projects include an EU-guaranteed EIB loan of 350m euros, complemented by a blending support package of 45m euros that includes technical assistance and an investment grant.
In addition, an accompanying Green Energy Transition project worth €12 million which includes 7 million euros that is co-financed by Germany aims to work on policy, legal framework, and investment climate to facilitate an inclusive green energy transition. This project is part of Bangladesh’s initiative to reduce its reliance on fossil fuels and combat climate change.
This financing will provide much needed support to the “Mujib Climate Prosperity Plan,” which aims to make the country capable of generating at least 6,000MW of electricity from renewable sources, including solar power plants and wind farms, by 2030.
As per the Mujib Climate Prosperity Plan, overall projected electricity generation will reach 28,975MW in 2030, with renewable energy's share increasing to 17.4%. Currently, it is only 4.6%. This will result in a 27.8% reduction in the use of fossil fuels and an 80.1% increase in renewable energy use within seven years, read a recently concluded study by Centre for Policy Dialogue.
Five additional cooperation actions, worth an additional 70m-euro package in cooperation actions were signed between the European Union and Bangladesh in support of the education sector to promote the decent work agenda, scale up green construction, boost effective digital governance, and to prevent gender-based violence in public spaces in the country.
PM Sheikh Hasina said: “We are confident that this initiative will enable developing countries such as Bangladesh to fight climate change, to address infrastructure gaps, invest in renewable energy, digital innovation, healthcare, education and much more. The Global Gateway is a sign of friendship, of partnership, of trust, of symbiotic interdependence."
She also called upon the European Union to extend its business facilities for six more years for Bangladesh like developing countries to smoothen its journey towards prosperity after LDC graduation.
The premier has requested the European Union to extend its business facilities for six years instead of three years as Bangladesh, like other least developed countries, have now been under pressure economically due to the Covid-19 pandemic and war, Foreign Minister AK Abdul Momen told a press briefing quoting the Prime Minister.
The PM attended a total of nine events including the opening plenary session of the Global Gateway Forum and other side events including bilateral talks.
Several bilateral talks were held with EC President Ursula von der Leyen, Trade Commissioner and Executive Vice President of EC Valdis Dombrovskis, Commissioner for Crisis Management of the EC Janez Lenarcic, Vice-President of the European Parliament Nicola Beer, European Investment Bank President Dr Werner Hoyer and Commissioner for International Partnerships of the EC Jutta Urpilainen.
The visit by PM Sheikh Hasina is significant in the sense that it will dispel the perception that Bangladesh is tilted towards China. “The message is Bangladesh wants to maintain good relations with all and infrastructure development is its top priority. Nothing else,” Professor of International Relations Delwar Hossain of Dhaka University told the Dhaka Tribune.
The EU understands that developing nations like Bangladesh have huge demand for funds for their infrastructural development and without providing them means to address the need it will be impossible to sway these nations from Chinese influence. Bangladesh’s invitation to the summit entails that the notion that Bangladesh has gone under Chinese belt is an overstatement and the nation is simply looking for funds to achieve its target of becoming a developed country by 2041.
Bangladesh has maintained a consistent GDP growth over 6% for more than a decade and in the last 15 years alone the size of the economy has tripled to around $450bn. And the EU is ready to provide financing by soft concessional loans and grants.
The Global Gateway strategy embodies a Team Europe approach that brings together the European Union, EU Member States, and European development finance institutions with an aim to mobilize 300bn euros in public and private investments from 2021 to 2027, creating essential links rather than dependencies, and closing the global investment gap.
Tanmoy Dhar is a freelance contributor.
