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Re-invigorating the Russian connection
Published : Monday, 28 January 2013
Muhammad Zamir
The visit of Prime Minister Sheikh Hasina to Russia from January 14 to 16 has been an important historic step aimed at expanding the scope of bilateral relations with that country. It will also help to open doors in general with other members of the Shanghai Cooperation Organisation (SCO) and, in particular, with countries which were till the early '90s member countries of the former Soviet Union (USSR).
This was Hasina's second visit to Russia during her present term in office. In November 2010, she went to St. Petersburg to participate in the First Tiger Summit, an international effort aimed at ensuring preservation of the habitat of tigers--a proud symbol of Bangladesh. During that visit, the Prime Minister used the opportunity to discuss with the then Russian Prime Minister Vladimir Putin (currently the President) areas of engagement whereby bilateral relations between the two countries could be taken forward in energy, agriculture and defence.
This initiative gained momentum over the past two years. Discussions between senior officials of both governments have resulted in this latest bilateral initiative. It has ended in the signing of several MoUs (memorandum of understanding) pertaining to different areas of cooperation (combatting terrorism, healthcare, education, culture and agriculture) and also two inter-governmental agreements whereby Bangladesh will receive loans for purchasing Russian defence equipment and construction of a nuclear power plant in Rooppur aimed at relieving the energy crunch in Bangladesh. An information centre for nuclear energy will also be established in Dhaka.
Some analysts have described this process as re-affirmation of the friendship that has existed between the two countries over the last four decades. They have in this context also recalled the important role played by the former USSR in the UN Security Council towards the end of our liberation struggle in 1971 and subsequently in helping clear the underwater mines planted by the Pakistani forces in the Chittagong port area. Late Russian Admiral Zuenko has since been recognised for his critical role at this time and awarded a national honour by us on March 27, 2012.
Our relations with Moscow initiated by Bangabandhu's visit to the then USSR in March 1972 subsided into cold storage after his tragic assassination in August 1975. The next serious contact came sixteen years later in the third quarter of 1991 with the visit to Moscow by the then foreign minister of Bangladesh, but nothing really emerged from the exercise. The internal turmoil that overtook USSR post 1991 affected the process.
The present government, after 2009, took a fundamental decision to expand its contacts with Russia and other states which were formerly part of the Soviet Union. We already had a diplomatic resident mission in Moscow and Tashkent, but it was generally recognised that we needed to examine further intensification of cooperation in other areas like energy, trade, agriculture, services sector and health.
It was clear from reports received from Bangladeshi entrepreneurs associated with the emerging Russian private sector that there was scope not only to diversify and expand our exports to this region but also to have a meaningful partnership in the area of energy, both nuclear and renewable. In 2010-11, exports from Bangladesh to Russia touched $90.7 million and have since increased further. Two-way trade crossed $700 million in 2012. Analysts believe that there is every possibility of bilateral trade reaching $1 billion over the next three years through additional Bangladeshi exports in the ready-made garments (RMG) sector, the pharmaceutical sector and in the services sector. The Prime Minister's statement in Moscow outlined measures to promote Russian investment through deepening cooperation between chambers of the two countries and formation of a Joint Business Council. Russia has also been requested to grant Bangladesh duty- and quota-free access and GSP (Generalised System of Preferences) facility for its exports to that country.
Russia's contribution in Bangladesh's energy sector has been important for some time and nearly 30 per cent of the power grid within Bangladesh has been set up by them. Three associated companies of the state-owned Petro Bangla signed in April 2012, an agreement with Russia's Gazprom Company worth $193.5 million to drill 10 more gas wells in Bangladesh. The relevant authorities in Bangladesh have sought Gazprom as an instrumental partner in view of their experience in constructing drilling pads, drilling not only on land but also in the sea, in rig shifting and commissioning, procurement of drilling materials and engaging with third party service providers. It has also been noted by the Finance Minister that the cost of their association is significantly less than that of others.
Russia's involvement with Bangladesh in establishing a nuclear capacity in this country has arisen out of the mutual belief that nuclear energy can be a possible solution to our energy shortfall problem. Both countries believe in the peaceful use of nuclear energy and Bangladesh is also a signatory of the NPT (Nuclear Non-Proliferation) regime.
It is true that some industrialised countries are seriously considering stepping out of the nuclear cycle and focusing on increasing energy output through alternative sources like solar, wind and bio-fuel. Despite having large proven deposits of coal, to avoid aggravating its carbon foot-print, Bangladesh, consistent with international trend, has also started using solar power and bio-gas in a meaningful manner. Using wind energy as another alternative is also under study.
Our belief in reducing reliance on hydro-carbons has led us to seeking the nuclear energy route. Agreements have now been signed in Moscow with the Russian Atomic Energy Commission to set up two third generation reactors with the capacity of producing 1000 MW power each. An initial loan of $500 million has been agreed upon for preparatory work and that will be followed by another loan agreement for the completion of the project. Bangladesh will also partially finance it with its own funds.
Enriched uranium for this purpose will come from Russia. It is being expected that the IAEA (International Atomic Energy Agency) will be closely associated in maintaining required environmental safety standards and that nuclear waste will also be repatriated to Russia for eventual disposal. The Russian Atomic Energy Commission under the agreed initial loan will initiate the necessary steps not only to prepare the nuclear reactor site according to international specifications but also will start required training of available technical human resources in Bangladesh. It is being hoped that the two reactors will come on stream and start contributing to the national energy grid by 2021. Despite sceptical views by some I believe that such a scenario is a doable and that we will succeed in our joint venture.
There has also been an agreement to purchase defence equipment from Russia under $1.0 billion loan with an interest rate of 4.5 per cent (to be repaid in 15 years). A senior official of our Armed Forces Division has further revealed that the loan will be used to procure more modern equipment (tank destroyer missiles, armoured personnel carriers, mechanised pontoon bridge for the army combat trainer aircrafts and military helicopters) not only for increasing the capacity of our UN peace-keeping forces but also for ensuring the security of the country's exclusive economic zone. It has also been indicated that the loan repayment will be through funds received from the United Nations for our peace-keeping participation. The total purchase of equipment will finish by 2017 and loan payment completed by 2028. Such purchases, it may be recalled, will be in addition to recent procurements made for the Army and the Air Force from our traditional arms supplier--China.
There has however been an outcry from certain quarters that such an option should have been first discussed in a transparent manner. Some strategic analysts have also pointed out that if the weapons and equipment being purchased do not fit in within the group of already available equipment that is being used by the Bangladesh armed forces, it might create problems. Technical experts will know better but I do not see anything wrong in diversifying our sources of military equipment. Alternatives will ensure competition among suppliers.
President Putin has been invited to visit Bangladesh. Sooner it takes place the better.
We have to build on what has been achieved. Both sides of the divide in our political process need to understand this. Instead of a derogatory approach, the Opposition should use the Jatiya Sangshad to ensure transparency and accountability of the implementation process of the joint ventures agreed upon with Russia.
Muhammad Zamir, a former Ambassador, is an analyst
specialised in foreign affairs, right to information and good governance.
mzamir@dhaka.net
Financial Express :: Financial Newspaper of Bangladesh
Published : Monday, 28 January 2013
Muhammad Zamir
The visit of Prime Minister Sheikh Hasina to Russia from January 14 to 16 has been an important historic step aimed at expanding the scope of bilateral relations with that country. It will also help to open doors in general with other members of the Shanghai Cooperation Organisation (SCO) and, in particular, with countries which were till the early '90s member countries of the former Soviet Union (USSR).
This was Hasina's second visit to Russia during her present term in office. In November 2010, she went to St. Petersburg to participate in the First Tiger Summit, an international effort aimed at ensuring preservation of the habitat of tigers--a proud symbol of Bangladesh. During that visit, the Prime Minister used the opportunity to discuss with the then Russian Prime Minister Vladimir Putin (currently the President) areas of engagement whereby bilateral relations between the two countries could be taken forward in energy, agriculture and defence.
This initiative gained momentum over the past two years. Discussions between senior officials of both governments have resulted in this latest bilateral initiative. It has ended in the signing of several MoUs (memorandum of understanding) pertaining to different areas of cooperation (combatting terrorism, healthcare, education, culture and agriculture) and also two inter-governmental agreements whereby Bangladesh will receive loans for purchasing Russian defence equipment and construction of a nuclear power plant in Rooppur aimed at relieving the energy crunch in Bangladesh. An information centre for nuclear energy will also be established in Dhaka.
Some analysts have described this process as re-affirmation of the friendship that has existed between the two countries over the last four decades. They have in this context also recalled the important role played by the former USSR in the UN Security Council towards the end of our liberation struggle in 1971 and subsequently in helping clear the underwater mines planted by the Pakistani forces in the Chittagong port area. Late Russian Admiral Zuenko has since been recognised for his critical role at this time and awarded a national honour by us on March 27, 2012.
Our relations with Moscow initiated by Bangabandhu's visit to the then USSR in March 1972 subsided into cold storage after his tragic assassination in August 1975. The next serious contact came sixteen years later in the third quarter of 1991 with the visit to Moscow by the then foreign minister of Bangladesh, but nothing really emerged from the exercise. The internal turmoil that overtook USSR post 1991 affected the process.
The present government, after 2009, took a fundamental decision to expand its contacts with Russia and other states which were formerly part of the Soviet Union. We already had a diplomatic resident mission in Moscow and Tashkent, but it was generally recognised that we needed to examine further intensification of cooperation in other areas like energy, trade, agriculture, services sector and health.
It was clear from reports received from Bangladeshi entrepreneurs associated with the emerging Russian private sector that there was scope not only to diversify and expand our exports to this region but also to have a meaningful partnership in the area of energy, both nuclear and renewable. In 2010-11, exports from Bangladesh to Russia touched $90.7 million and have since increased further. Two-way trade crossed $700 million in 2012. Analysts believe that there is every possibility of bilateral trade reaching $1 billion over the next three years through additional Bangladeshi exports in the ready-made garments (RMG) sector, the pharmaceutical sector and in the services sector. The Prime Minister's statement in Moscow outlined measures to promote Russian investment through deepening cooperation between chambers of the two countries and formation of a Joint Business Council. Russia has also been requested to grant Bangladesh duty- and quota-free access and GSP (Generalised System of Preferences) facility for its exports to that country.
Russia's contribution in Bangladesh's energy sector has been important for some time and nearly 30 per cent of the power grid within Bangladesh has been set up by them. Three associated companies of the state-owned Petro Bangla signed in April 2012, an agreement with Russia's Gazprom Company worth $193.5 million to drill 10 more gas wells in Bangladesh. The relevant authorities in Bangladesh have sought Gazprom as an instrumental partner in view of their experience in constructing drilling pads, drilling not only on land but also in the sea, in rig shifting and commissioning, procurement of drilling materials and engaging with third party service providers. It has also been noted by the Finance Minister that the cost of their association is significantly less than that of others.
Russia's involvement with Bangladesh in establishing a nuclear capacity in this country has arisen out of the mutual belief that nuclear energy can be a possible solution to our energy shortfall problem. Both countries believe in the peaceful use of nuclear energy and Bangladesh is also a signatory of the NPT (Nuclear Non-Proliferation) regime.
It is true that some industrialised countries are seriously considering stepping out of the nuclear cycle and focusing on increasing energy output through alternative sources like solar, wind and bio-fuel. Despite having large proven deposits of coal, to avoid aggravating its carbon foot-print, Bangladesh, consistent with international trend, has also started using solar power and bio-gas in a meaningful manner. Using wind energy as another alternative is also under study.
Our belief in reducing reliance on hydro-carbons has led us to seeking the nuclear energy route. Agreements have now been signed in Moscow with the Russian Atomic Energy Commission to set up two third generation reactors with the capacity of producing 1000 MW power each. An initial loan of $500 million has been agreed upon for preparatory work and that will be followed by another loan agreement for the completion of the project. Bangladesh will also partially finance it with its own funds.
Enriched uranium for this purpose will come from Russia. It is being expected that the IAEA (International Atomic Energy Agency) will be closely associated in maintaining required environmental safety standards and that nuclear waste will also be repatriated to Russia for eventual disposal. The Russian Atomic Energy Commission under the agreed initial loan will initiate the necessary steps not only to prepare the nuclear reactor site according to international specifications but also will start required training of available technical human resources in Bangladesh. It is being hoped that the two reactors will come on stream and start contributing to the national energy grid by 2021. Despite sceptical views by some I believe that such a scenario is a doable and that we will succeed in our joint venture.
There has also been an agreement to purchase defence equipment from Russia under $1.0 billion loan with an interest rate of 4.5 per cent (to be repaid in 15 years). A senior official of our Armed Forces Division has further revealed that the loan will be used to procure more modern equipment (tank destroyer missiles, armoured personnel carriers, mechanised pontoon bridge for the army combat trainer aircrafts and military helicopters) not only for increasing the capacity of our UN peace-keeping forces but also for ensuring the security of the country's exclusive economic zone. It has also been indicated that the loan repayment will be through funds received from the United Nations for our peace-keeping participation. The total purchase of equipment will finish by 2017 and loan payment completed by 2028. Such purchases, it may be recalled, will be in addition to recent procurements made for the Army and the Air Force from our traditional arms supplier--China.
There has however been an outcry from certain quarters that such an option should have been first discussed in a transparent manner. Some strategic analysts have also pointed out that if the weapons and equipment being purchased do not fit in within the group of already available equipment that is being used by the Bangladesh armed forces, it might create problems. Technical experts will know better but I do not see anything wrong in diversifying our sources of military equipment. Alternatives will ensure competition among suppliers.
President Putin has been invited to visit Bangladesh. Sooner it takes place the better.
We have to build on what has been achieved. Both sides of the divide in our political process need to understand this. Instead of a derogatory approach, the Opposition should use the Jatiya Sangshad to ensure transparency and accountability of the implementation process of the joint ventures agreed upon with Russia.
Muhammad Zamir, a former Ambassador, is an analyst
specialised in foreign affairs, right to information and good governance.
mzamir@dhaka.net
Financial Express :: Financial Newspaper of Bangladesh
