Japan and Bangladesh eye economic partnership pact

Japan and Bangladesh are ready to start negotiations aimed at finalizing an Economic Partnership Agreement by the end of 2025.

That deadline precedes the South Asian nation’s currently scheduled 2026 graduation from the UN’s list of least developed countries and consequent loss of its exemption from developed nations’ tariffs.

When the US government looks at Bangladesh, it sees a faltering democracy where the recent elections failed to meet its own high standards. When Japan looks at Bangladesh, it sees a strategically situated nation of more than 170 million people growing at about 6% per year and with a GDP larger than the combined GDPs of the Philippines, Vietnam and Malaysia.

Bangladesh also has substantial economic ties with China and Russia, a fact that excites the Western urge to impose sanctions but convinces Japan to move ahead with the expansion of trade and cooperation in infrastructure development.

This is being done in cooperation with India. Following Japanese Prime Minister Fumio Kishida’s visit to New Delhi in March 2023, the Japan International Cooperation Agency (JICA) agreed to provide Bangladesh with new loans amounting to ¥165 billion ($1.12 billion at the current exchange rate) for the Matarbari Port Development Project, the Chattogram-Cox’s Bazar Highway Improvement Project and a small railway construction project north of Dhaka.

JICA is also active in northeastern India, financing the construction and improvement of hundreds of kilometers of roads, including the highway from Tripura to Chattogram.

The Matarbari project involves dredging a deep-water port (the first in Bangladesh) and building a power plant and an industrial park on the Bay of Bengal in the southern district of Cox’s Bazar.