Trade gap with India reaches $5.47 billion

[Sliver]

http://www.thedailystar.net/business/export/india-proposes-bangladesh-joint-study-exports-1499428

India has suggested Bangladesh to carry out a joint study on products being exported by the two countries in order to complement each other and attain synergy.

The proposal was made by Indian Commerce Minister Suresh Prabhu during a meeting with visiting Bangladesh’s Industries Minister Amir Hossain Amu at the former’s office on Friday.

seems like the EU formal is being applied.

 

[Homo Sapiens]

I would image a big part of the deficit is raw material used by Banagleshdi manufacturers who in turn off set the Indian deficit with a US/Europe surplus.

Yes, it is mostly raw cotton. But this years widening gap caused by the large rice import as 3 sucessive floods destroyed 2.2 million ton rice in BD. Most of this destroyed rice was replaced by import from India.

 

[Chaosmaster]

That is true, Pakistan doesn't have much choice, at least not at the amount being invested. Although why would China want to give Pakistan such a large loan. Is it merely to get steaady interest payments. If Pakistan were unable to pay, it would sour relations between the two countries, so China is calculating Pakistan would be able to pay over the long term. This is similar to how America Loaned Britain a sizable amount after WWII. This loan was paid off slowly, and the money at that critical time helped jump start the British economy.

China is building up an ally, and it is an application of soft power writ large. It signals to other nations that partnering with china and getting on board the OBOR (One Belt One Road) intitive can benefit them s well.

For China; Pakistan will become a nation on its border that can facilitate development of its western regions.

China has no problems in providing loans to country even if they cannot pay it back. they did this with Venezuela even though the country was going bankrupt all for getting discounts on oil and salvaging whatever is left, the same happened with sri lanka.

So you are right in saying that partnering with china may be beneficial to them, read the article titled "Venezuela road to disaster is littered with Chinese cash" on website foreignpolicy and if history is any evidence then you would understand that it would be beneficial only for a short duration of time and problems strikes when you have to start repayment of loans.

This is the gamble Both the Government of Pakistan and the Chinese are taking. I don't have any examples where this has worked. The Pakistan government is probably thinking China will write some of these loans off, for favors or "services rendered" (same old ways). I have the same understanding of the Chinese development model. I hope reforms accompany these investments to attract FDI and build on the CPEC infrastructure, failure would have ripple affects beyond just Pakistan.

Write off? why? its pure business, you are getting new roads and other projects that will definitely benefit you in the short run might/hopefully (also to the interest of india) will continue to do so in the long run but china is already getting what they want, strategic territory.

http://www.thedailystar.net/business/export/india-proposes-bangladesh-joint-study-exports-1499428

India has suggested Bangladesh to carry out a joint study on products being exported by the two countries in order to complement each other and attain synergy.

The proposal was made by Indian Commerce Minister Suresh Prabhu during a meeting with visiting Bangladesh’s Industries Minister Amir Hossain Amu at the former’s office on Friday.

seems like the EU formal is being applied.

such study has already been carried out by UNO and found that major component of export from india is agricultural and food products followed by textiles.

 

[FuturePAF]

but china is already getting what they want, strategic territory.

This is the question. What do they get if loan payments can't be repaid fully? what does strategic territory mean; exclusive access to faculties, total control over parts of the debtor nations' territory, or request for services in lieu of that month's payment.

 

[Chaosmaster]

This is the question. What do they get if loan payments can't be repaid fully? what does strategic territory mean; exclusive access to faculties, total control over parts of the debtor nations' territory, or request for services in lieu of that month's payment.

Exactly. if you look closely, they are *Investing* (read:- indebting) in nations that generally don't have desired level of excess to finance from well established institutions like world bank or IMF. China provides them large amount of loans which banks refuse. They did this is Venezuela, in African nations and also in sri lanka. They got large number of barrels of oil from Venezuela while china just wrote off the payments of loan and interest amount. They got the port of fck*g 99 years from sri lanka. And the same thing is happening in the case of OBOR around various not so financially well to do nations, and such is the case with CPEC in Pakistan. All the work is being carried out by Chinese companies, material that is being used to develop these facilities in Chinese, professionals are Chinese and in some cases event the labour is Chinese. In most cases these projects don't turn out to be as profitable for the hose nations as Chinese promise and that's when the financial crunch starts to hit the economy of the nation because they don't have the money to repay, and this is when china sweeps in take control of whatever it is they built or ask for payment in kind and that could be any resource that country is rich in. Venezuela had oil so they asked for oil, Sri lanka has strategic position in Indian ocean so they asked for it and if the same happens with Pakistan (which IMO is very likely in another decade) they take control of the land Gwadar thus safeguarding their oil supply line from gulf countries and also getting naval base with that pretext right next to India.

 

[navtrek]

Bangladesh mostly import food items , raw materials, transport vehicles etc. Despite Bangladesh haveing capability to export many products like garments, construction materials, battery and others, india put barriers to block Bangladeshi export. Situation got acute since indian stooge awami regime took the power with indian interference and money.

Come on bro only 25 items. I think that much at-least should reasonable.
India has been providing tariff-free access to all Bangladeshi products (except 25 restrictive items) since 2011.

 

[Species]

No, either you are completely unaware or you are trying to hide the facts.

https://www.fashionatingworld.com/new1-2/bangladesh-s-export-to-india-up-marginally

For the same period you have quoted the Chinese exports, BD's export to India also increased. Moreover, After India granted duty free quota free access to Bangladesh in 2011, the RMG exports to India have more than doubled to $136.4 million in 2015-16 from $55 million in 2011-12. In 2015-16, Bangladesh’s RMG exports to India grew by 31 percent. Bangladesh’s overall exports to India have also increased by 30.82 percent at the same time.

So you guy's blindly claiming that India is creating barrier is nothing but blatant lie.

2015-16 could be just one exceptional year. I think you didn't read the OP. In 2016-17, exports to India actually decreased.

On the other hand, exports to India dropped marginally in FY17 to $672.4 million from $689.62 million in FY16.

Take a look at the trends of our exports to China and that to India:

As you can see, export to China is steadily increasing while export to India just remains stagnant in the bigger time-frame.

If you look closely, export to India does witness occasional growths in some years but the decrease in the succeeding years makes it stagnant overall. The reason is, whenever a particular Bangladeshi product becomes popular in India, the Indian government would impose different tariff and non-tariff barriers on the Indian importers of that industry to discourage imports from Bangladesh. And that ultimately reduces our exports to India.

 

[FuturePAF]

Exactly. if you look closely, they are *Investing* (read:- indebting) in nations that generally don't have desired level of excess to finance from well established institutions like world bank or IMF. China provides them large amount of loans which banks refuse. They did this is Venezuela, in African nations and also in sri lanka. They got large number of barrels of oil from Venezuela while china just wrote off the payments of loan and interest amount. They got the port of fck*g 99 years from sri lanka. And the same thing is happening in the case of OBOR around various not so financially well to do nations, and such is the case with CPEC in Pakistan. All the work is being carried out by Chinese companies, material that is being used to develop these facilities in Chinese, professionals are Chinese and in some cases event the labour is Chinese. In most cases these projects don't turn out to be as profitable for the hose nations as Chinese promise and that's when the financial crunch starts to hit the economy of the nation because they don't have the money to repay, and this is when china sweeps in take control of whatever it is they built or ask for payment in kind and that could be any resource that country is rich in. Venezuela had oil so they asked for oil, Sri lanka has strategic position in Indian ocean so they asked for it and if the same happens with Pakistan (which IMO is very likely in another decade) they take control of the land Gwadar thus safeguarding their oil supply line from gulf countries and also getting naval base with that pretext right next to India.

Honestly, This is what they probably will do as the Government of Pakistan doesn't seem like it has its act together to bring up the economy to pay back the loans as in my example of the British paying back the American loan. They will probably get Gwadar and a large area of land around it. any major pipeline, railroads, and roads will operate with heavy tolls for their use going to the Chinese. Failure to pay back the loans goes to the government (especially the ruling party; PML-N) and those that enabled these projects with out an effective cost-benefit analysis. This has the hallmarks of an albatross I'm sad to say. The problem with CPEC is it is too big to fail. It is tied to the relationship between Pakistan and China. The Chinese need to be smart not to let their banks and construction companies screw over Pakistan with out finding a way of helping Pakistan pay back China; which should mean increasing Pakistani exports to China itself and making loan repayments feasible. Failure to do so will be the death nail in CPEC, and OBOR as a whole. Sri Lanka's Port and The Venezuelan deal were an order of magnitude small affairs. Further away nations, independent of OBOR initiatives, and not a neighboring nation. Instability of China's border may sour other neighbors, and weaken Chinese Soft Power. Such as dealing with Central Asian nations or South East Asian nations, when proposing similar infrastructure projects.

The Government of Pakistan and the Government of China heed the warning above, it is a potential disaster of their own making, and should be managed no less vigorously then as if a world war were being fought, by BOTH sides.

 

[Chaosmaster]

Honestly, This is what they probably will do as the Government of Pakistan doesn't seem like it has its act together to bring up the economy to pay back the loans as in my example of the British paying back the American loan. They will probably get Gwadar and a large area of land around it. any major pipeline, railroads, and roads will operate with heavy tolls for their use going to the Chinese. Failure to pay back the loans goes to the government (especially the ruling party; PML-N) and those that enabled these projects with out an effective cost-benefit analysis. This has the hallmarks of an albatross I'm sad to say. The problem with CPEC is it is too big to fail. It is tied to the relationship between Pakistan and China. The Chinese need to be smart not to let their banks and construction companies screw over Pakistan with out finding a way of helping Pakistan pay back China; which should mean increasing Pakistani exports to China itself and making loan repayments feasible. Failure to do so will be the death nail in CPEC, and OBOR as a whole. Sri Lanka's Port and The Venezuelan deal were an order of magnitude small affairs. Further away nations, independent of OBOR initiatives, and not a neighboring nation. Instability of China's border may sour other neighbors, and weaken Chinese Soft Power. Such as dealing with Central Asian nations or South East Asian nations, when proposing similar infrastructure projects.

The Government of Pakistan and the Government of China heed the warning above, it is a potential disaster of their own making, and should be managed no less vigorously then as if a world war were being fought, by BOTH sides.

I wont argue on the point of relationship and friendly relations between china and pak because IMO its all just their game, there are no friends in geo politics only interests.
However you other point that CPEC is too big to fail is relevant, A total of $64bn!! however a year ago that figure stood up at $46bn. it was for highways and ports and we are seeing investments for new coal based plants, fibre communications for both civil and military use which will be maintained by china, even military channels (correct me if I'm wrong), new dams. and we still don't know if this is all or not. My point is there is no transparency even in the number and type of projects that will be undertaken under CPEC, no information about the terms of loans, interest, repayment, situation of inability to repay.

However, the point that cpec is too big to fail has two sides. Its too big to fail for who? Pakistan or China? CPEC is just part of OBOR and as per early 2017 figures china is investing a total of $800bn and this figure could well cross $1tn mark. CPEC is only a tiny part of the whole project. So clearly china wont allow CPEC to fail for themselves. they care about only the project, how does it matter if Pakistan is operating it or not, if Pakistan cant they would do it themselves and would be more confident about the project as its directly under their authority and oversight.
If for once you look at it without bringing in the *all weather partnership* you would realist that Chinese would be happier to have direct control of projects under CPEC.
And nothing is too big to fail, things much bigger and important have failed in the past, in the 2009 crisis when Morgan Stanley chase, JP morgan, lehman brothers, AIG, HBOS, Freddie Mac and frennie mac all failed and triggered a world wide economic collapse.

 

[FuturePAF]

I wont argue on the point of relationship and friendly relations between china and pak because IMO its all just their game, there are no friends in geo politics only interests.
However you other point that CPEC is too big to fail is relevant, A total of $64bn!! however a year ago that figure stood up at $46bn. it was for highways and ports and we are seeing investments for new coal based plants, fibre communications for both civil and military use which will be maintained by china, even military channels (correct me if I'm wrong), new dams. and we still don't know if this is all or not. My point is there is no transparency even in the number and type of projects that will be undertaken under CPEC, no information about the terms of loans, interest, repayment, situation of inability to repay.

However, the point that cpec is too big to fail has two sides. Its too big to fail for who? Pakistan or China? CPEC is just part of OBOR and as per early 2017 figures china is investing a total of $800bn and this figure could well cross $1tn mark. CPEC is only a tiny part of the whole project. So clearly china wont allow CPEC to fail for themselves. they care about only the project, how does it matter if Pakistan is operating it or not, if Pakistan cant they would do it themselves and would be more confident about the project as its directly under their authority and oversight.
If for once you look at it without bringing in the *all weather partnership* you would realist that Chinese would be happier to have direct control of projects under CPEC.
And nothing is too big to fail, things much bigger and important have failed in the past, in the 2009 crisis when Morgan Stanley chase, JP morgan, lehman brothers, AIG, HBOS, Freddie Mac and frennie mac all failed and triggered a world wide economic collapse.

A $64 Billion investment in one country, the largest OBOR set of infrastructure projects yet, Is the equivalent of a Chinese Marshall Plan, a long term investment to bring a nation back up to the level of its trading partner in hopes of increasing trade. It is too big to fail for Pakistan (without a doubt), but if it fails, China too will be adversely affected. we too have to define failure. The Sri Lankan example of operating the port for 99 years is something the shortsightedness of the Pakistani government won't mind. It doesn't solve the problem, just sells our sovereignty one piece at time.

Those banks that failed were bailed out with American taxpayer money, this would be as if these CPEC projects fail, and the Chinese government bails out Pakistan's payments. If China isn't willing to do that, then its too big to fail. I am not looking at it from the view of Pakistan's Friendship with China, but rather as CPEC is an acquisition that has to be utilized otherwise it will be worse then nothing, it will be a drag on the entire nation.

Frankly, the war footing level of seriousness that needs to be taken, should make the government and military have an all parties meeting and iron out a plan for career civil servants to manage a 30 year national strategy; call it project 2047; where the loan will be effectively paid off in 30 years, the national economic development in six 5 year plans will effectively utilize CPEC to become a middle income nation like China, and plan for how to use our demographic dividend before the opportunity is lost. Consultative advice by the China, will not only help manage development in Pakistan, but help foster a push for following best business practices. An Economic Cultural shift is needed along with these investments to focus the nation if CPEC is to be fully utilized. Therefore as the loan starts to be paid off on a steady basis, it can be seen for what is meant to be, A jump start and not an albatross; a burden.