Belt and Road is a net win for Bangladesh

In recent years, China has become Bangladesh’s largest trading partner and one of its largest donors of development aid. A strategic partnership has existed between the two sides since 2016.

Like 150 other countries, Bangladesh joined China’s Belt and Road Initiative (BRI). Since then, nine belt and road projects have been agreed, including the Padma Railway Link, the Bangabandhu Tunnel under the Karnaphuli River and the Dasherkandi Wastewater Treatment Plant.

These three are nearing completion, while six other projects are either underway or waiting to begin. Aside from Belt and Road, China offers development finance in various forms, including public-private partnerships and soft loans. As Bangladesh warmly embraced these loans and projects, the past eight years have seen a boom in Chinese projects across the country.

While the specter of a “debt trap” hovers over the relationship as skeptics drew parallels with Sri Lanka’s Hambantota port lease, Bangladesh seems to have proved the specter — in its own case at least — to be a myth about Dhaka’s efforts towards sustainable infrastructure .

Bangladesh’s deepening trade and financial engagement with China has created an image of a “China-leaning country” in US eyes – even as Bangladesh is determined to remain neutral amid superpower rivalry. Despite fears of a debt trap, Bangladesh appears to be reaping a net benefit from BRI and other Chinese projects.

One caveat: Net benefits are the summation of all benefits and then subtracting the sum of all costs of a project. Net utility represents an absolute measure of utility rather than the relative measure provided by a benefit-cost ratio, which is perhaps the more popular approach to determining success and failure in today’s neoclassical economics.

While net profit is usually expressed as a cracked number, i.e. a concrete amount of money, I am not aware of any quantitative analysis specific to the Belt and Road projects in Bangladesh.

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