Investment plans on paper

First the good news: two of the largest Indian conglomerates have pledged to invest US$11.2 billion in Bangladesh in power, energy and infrastructure sectors. Adani Group and the Reliance Group have made public their plans to construct power plants, LNG terminal, grid connection, port and other logistics. Two power plants are slated to produce 3,200 megawatts (MW) that will supply power to the national grid. The package includes an investment of $5 billion for construction of a new grid connection which will enable, in the long run, for Bangladesh to be interconnected to the envisaged regional Power Trading System in South Asia. Reliance is touting a $3 billion package for a liquefied natural gas (LNG) facility that will power a plant with a capacity to generate 3,000MW of power.

These investments, if made operational, will go a long way to mitigate the energy crunch the country faces currently. They will also generate substantial employment for technical and non-technical personnel. Indeed, the government has assured foreign investors that it would fast track investment proposals in terms of simplifying rules and procedures to facilitate implementation within stipulated timeframes. This was made clear during the recently held two-day investment summit held in Dhaka.

Tea garden workers in Chandpur of Habiganj protest the government decision to set up a special economic zone in the arable land of the tea estates. PHOTO: STAR
The not so good news: we understand that the Bangladesh Power Development Board signed an agreement with both Indian groups (mentioned above) in June, 2015 to generate approximately 4,600MW of power, yet there apparently seems to be little progress to implement the agreement. Both Adani and Reliance, and in fact, most foreign companies interested in investing in Bangladesh have sought government aid with land acquisition – a fundamental prerequisite to setting up any infrastructure project, and here the situation gets decidedly convoluted. When it comes to implementation, whether it is getting paperwork done or handling land issues, we have serious problems with delivery.

We are told that a new body named Bangladesh Development Authority has been formed to simplify procedures. 100 economic zones will be established across the country and some thirty sites have been selected. While all that looks very good on paper, it is obvious that setting up an economic zone without prior consultation with people in the locality in a densely populated, largely agrarian country is going to run into trouble. This is all too evident in what has happened in Habiganj. Tea estate workers have been protesting en masse about a proposed transfer of 511 acres of land falling under Chandpur tea gardens. The tea workers in question utilise these lands to grow crops to supplement their diet. Going by what has been published in this paper, 951 acres of arable land falling under the tea estate have been cultivated by workers for more than a century. These people are tied to their lands, and to ask them to vacate, will inevitably result in a grassroots movement – as has happened. The situation in Habiganj has now drawn support from workers in gardens across Brahmanbaria, Sylhet and Moulvibazar and spells trouble for the tea industry as a whole.

The government has a point. The land is owned by the government but leased to the estate. Experts will be better able to explain the legal angles pertaining to whether authorities can cancel the lease agreement or not, but the sudden move to transfer more than 50 percent of the land leased to Bangladesh Economic Zones Authority, without making arrangements to safeguard the livelihoods of thousands of workers is an appalling way to go about doing things.

The argument for special economic zones dedicated to foreign investors is equally strong. We simply do not possess the financial might to upgrade our infrastructure. Without adequate power, there can be no industry, which means no new employment. Without ports and terminals, we cannot look to increasing container handling over maritime routes to boost imports and exports. And although major studies by international institutions have pitted Bangladesh as one of the “next 11” major economies of the world, that scenario is not going to materialise until we can address our infrastructure bottlenecks. The massive interest generated in Bangladesh by major Asian economic powers ranging from China, India and Japan, is not just because we are strategically located in South Asia but also because Bangladesh possesses a large population of nearly 170 million, where the young constitute a major share.

At the end of the day, the opportunities for foreign investment are there. Laying the foundations for new economic zones is one part of the equation. The other calls for a more pragmatic approach where people are displaced – and there will inevitably be displacement of communities and they must be compensated in one form or another. Otherwise, the state will be pitting itself against its own people. Will authorities be willing to pick up the tab for fatalities when push comes to shove? Strong arm tactics may win the battle in the short run, but an enraged local populace will not bring dividends in the long run. No issue is more contentious than land and this is why it would be prudent to tread carefully and not forcefully.