Asia Times :
Bangladesh’s economy faces a perfect storm with double-digit inflation pinching wallets, foreign exchange reserves dwindling and economic growth fading away. To weather the crisis, the government is desperately seeking foreign loans.
Enter China into the eye of the tempest. With a timely US$5 billion soft loan, Beijing has positioned itself as Bangladesh’s potential financial savior. Beijing’s support comes just after Dhaka received a $1.4 billion tranche of a $4.7 billion IMF loan package.
But China’s offer has a geopolitical twist. Bangladesh’s economic vulnerability has opened an opportunity for China to counter India’s influence in the Bay of Bengal region as the two regional giants compete for control over the Teesta River project.
The Teesta River, also spelled Tista River, is crucial
for both Bangladesh and India for irrigation and hydropower. It has also been a source of bilateral tension for years due to India’s reluctance to share the river’s water downstream.
Now, Beijing’s $5 billion loan is seemingly tied to making China the lead on completing the Teesta management and restoration project, provisionally estimated at $1 billion.
If China is indeed handed the project’s lead, it will inevitably spur new tension between Dhaka and Delhi. That’s in part because Indian Foreign Secretary Vinay Mohan Kwatra during a recent visit offered Indian funding for development projects on the river.
India’s Teesta offer was taken with a grain of salt in Dhaka. Before Kwatra’s visit, a major Indian newspaper, The Hindu, expressed concern about China’s proposed Teesta development project in Bangladesh.
India’s apprehension stems from the project’s location near the Siliguri Corridor, a strategically important strip of land connecting India’s northeast to the mainland. Nicknamed the “Chicken’s Neck,” this corridor holds immense geopolitical significance.
India fears China’s involvement in the Teesta project could be a veiled attempt to establish a foothold near this sensitive region. The Teesta River is Bangladesh’s lifeblood. As the country’s fourth largest river and the primary source of water for its northern regions, it’s crucial for irrigation, supporting millions of citizens and a significant portion of agricultural production. India’s water diplomacy, however, hasn’t been very diplomatic from Dhaka’s perspective. Bangladesh experts allege that upstream dams constructed by India have restricted water flow, significantly and negatively impacting downstream Bangladesh. During dry seasons, Bangladesh receives only a fraction of the 1,200-1,500 cubic feet per second of water it needs and much less compared to the perceived ideal 5,000 cusecs, with levels dropping even below 200-300 cusecs at times.
