PM Tarique Rahman Leaves for Japan Tomorrow: Summit, Updated ‘BIG-B’ and Hopes of One Trillion Yen in Investment

Prime Minister Tarique Rahman leaves for Japan tomorrow, 26 October, on a four-day visit. Alongside a summit meeting with Japanese Prime Minister Sanae Takaichi, he will visit a Toyota factory and JERA’s LNG terminal. During the visit, Japan’s redesigned “BIG-B” plan centred on the Bay of Bengal is being taken forward — in the updated BIG-B, investment, energy, maritime security and geopolitics are being bound together.

At the invitation of Japanese Prime Minister Sanae Takaichi, the Prime Minister will visit Japan from 26 to 29 October. During the visit he will deliver the keynote speech at the Japan-Bangladesh Economic Forum and visit the LNG terminal and power plant at Futtsu in Chiba. Bilateral talks with Takaichi will be held on 27 October.

Diplomatic sources in Dhaka and Tokyo said the BIG-B (Bay of Bengal Industrial Growth Belt) master plan, launched in 2014 at the initiative of then Japanese Prime Minister Shinzo Abe, is being updated on four pillars. That outline may be reflected in a joint statement after the formal meeting of the two prime ministers.

Japan has been one of the most reliable partners in Bangladesh’s infrastructure development from the start. The Matarbari deep seaport and power project, the Dhaka metro rail and the third terminal of Hazrat Shahjalal International Airport are among the mega projects carried out with Japanese assistance.

Diplomatic sources say that while Tokyo’s role had so far been largely limited to loan-based assistance, the emphasis is now on trade partnership and public-private investment (PPP). The Bangladesh-Japan Economic Partnership Agreement (EPA) was signed in February this year.

Japanese media outlet Nikkei Asia reported that Japan’s private sector is drawing up an outline to invest about one trillion yen in Bangladesh over the next five years (about 77,000 crore taka at the current conversion rate).

According to diplomatic sources, a large part of this investment plan is in manufacturing and energy. Japanese carmaker Toyota is planning an assembly plant in Bangladesh with an investment of about 500 million dollars. According to people involved, if domestic suppliers get work making parts and cables, a strong “backward linkage” industry can develop. And employment will be created for young engineers.

The gas crisis in the industrial sector is a major obstacle to Bangladesh’s growth. To overcome it, JERA, Japan’s largest energy producer, has proposed building an LNG terminal and related infrastructure in the Maheshkhali-Matarbari area, it has been learned. If implemented, pressure on gas and electricity in industry could ease. However, volatility in the global energy market and the price of the dollar will remain major challenges.

The 2014 BIG-B plan was mainly limited to building industry and a port around Matarbari. Diplomatic sources of the two countries say that, considering the growing strategic importance of the Bay of Bengal, it is now being updated into four pillars. First, giving priority to regional connectivity and integrated logistics to turn the Matarbari deep seaport and LNG infrastructure into a centre of international trade, aiming to facilitate goods transport with India’s north-eastern states, Nepal and Bhutan.

Second, creating risk management and geopolitical stability, so that in the event of natural disasters, global conflict or supply-chain disruption, Bangladesh can be kept ready as an alternative maritime route. Third, establishing public-private partnership and modern business rules, ensuring an international-standard “rules-based” process and reducing bureaucratic complexity. Fourth, establishing regional peace and maritime security, aiming to ensure free and safe navigation in the Bay of Bengal. Japan has already handed over five patrol vessels to the Bangladesh Navy. A diplomatic source in Tokyo said the process of giving the Coast Guard a modern 35-metre patrol ship may also advance during this visit.

The core essence of BIG-B lies in the geographical position of the Indian Ocean and the Bay of Bengal. The Bay of Bengal is not only Bangladesh’s trade gateway, but also the main maritime route connecting South and Southeast Asia. On one side, China is increasing its infrastructure presence and influence in the region through the Belt and Road Initiative (BRI). On the other, Japan and its allies have brought forward the idea of a Free and Open Indo-Pacific (FOIP).

Diplomatic sources of the two countries said that to hold its position in the Bay of Bengal, Bangladesh is important to Japan as a reliable and economically self-reliant strategic partner. At the centre of this strategy is Matarbari in Cox’s Bazar. If the deep seaport and energy hub come into full operation, it will not only increase Bangladesh’s imports and exports, but could also become an important route for goods transport from India’s north-east. That would create a new outline for alternative supply chains in South Asian trade, and Bangladesh could become a regional “logistics hub”.

Altogether, expectations surrounding this visit are not limited to a summit meeting alone. The investment outline, Toyota’s possible plant, JERA’s LNG proposal and reflection of the updated BIG-B in a joint statement — all eyes in Dhaka and Tokyo are now on these. Only after the summit on 27 October will it become clear how much of the paper plan is turning into real progress.