Hasina’s visit: Russia edges out China from Bangladesh

With her official visit to Moscow in mid-January, Bangladeshi Prime Minister Sheikh Hasina has taken the Russia-Bangladesh relations to a new height, keeping in view the historical foundation of bilateral friendship that was laid by her legendary father Bangabandhu Sheikh Mujibur Rahman, immediately after the liberation of Bangladesh, in 1971.

Hasina’s visit is the first by a Bangladeshi Prime Minister in the past 40 years. Sheikh Mujibur Rahman had visited Moscow in March 1972, to express his deep gratitude for the historic role played by the-then Soviet Union in the independence struggle of the Bangladesh. Earlier she paid a visit to St Petersburg in November 2010 to attend the Tiger Summit.

After her talks with Russian President Vladimir Putin in the Kremlin on January 15, ten agreements and MoUs were signed in the presence of two leaders, which included, in particular, the crucial deals on cooperation in the fields of nuclear energy, weapons supply, oil and gas exploration projects, and space. The bilateral deals signed are expected to open the path-breaking opportunities for the rapid development of cooperation between the two countries, aimed at giving a thrust to the Bangladeshi economy, in the near future.

“I believe the agreements would place our relationship on a firm footing and help in taking practical initiatives, in the future,” Hasina told reporters at the joint press conference, after the talks with Putin.

The agreement for setting up Bangladesh’s first nuclear power plant in the northwestern town of Rooppur was high on the agenda of Putin-Hasina talks, in Moscow. Officials said Bangladesh urgently wanted to start the construction of the nuclear power plant because its natural gas reserves could run out within a decade.

In November 2011, Dhaka signed a deal with Rosatom, the Russian state-run nuclear power corporation, to build a nuclear plant at Rooppur with two 1,000 megawatt reactors at a cost of up to $1.5 billion each.

Under the agreement on the construction of two reactors, Russia will grant a $500 million credit to finance the preparatory stage of the construction of the Rooppur nuclear power plant. Further costs will be partially financed through Bangladesh’s own funds and partially through another loan from Moscow.

However, the costs are likely to be lower than average prices on the international market due to what Rosatom head Sergei Kiriyenko said as “competitive advantages.”

“In fact, Russia will not only supply the latest technology, which is natural, just as we do in our own country, and in other countries, but we will also provide financial support at the initial stage of construction,” Putin told reporters at a joint press conference after talks with Hasina. He also said under the agreement Russia will establish an information centre for nuclear energy in Dhaka.

Kiriyenko also made it clear that the project’s design would be based on “up-to-date technologies,” taking into account the recent reactor meltdown at the Fukushima nuclear plant in  Japan. The blocks will include dual containment of the reactor, a passive heat removal system and hydrogen recombiners. The plant will be able to withstand a powerful seismological event, he said.

“The nuclear power plant in Bangladesh with Russian technical and financial assistance is a shiny example of our deeper engagement,” Hasina said.

According to an inter-governmental agreement on the construction of reactors signed on November 2, 2012, Russia will supply nuclear fuel for the plant for the entire period of its exploitation. Experts from Bangladesh would also be trained in Russia.

Preparatory works at the plant’s site will begin on January 1, 2014. The construction will start in 2015 and the power plant, according to the schedule, will be launched in 2020.

It may be recalled that when BNP leader Khaleda Zia was the Prime Minister, she had approached China to help build nuclear reactors in the country. Accordingly, some initial negotiations were also carried out, but before any significant progress could be made, Hasina returned as Prime Minister in January 2009. Under her leadership, Bangladesh clinched the deal with Russia for building the reactors, thus closing the doors for China for ever.

Another important outcome of Hasina’s visit, is the signing of an agreement, under which Russia has pledged to grant a $1 billion loan to Bangladesh for arms purchases.

“Our countries intend to expand military-technological cooperation. Russia (and you have seen the signing of this agreement) will extend a $1 billion loan to Bangladesh to buy Russian weapons and military equipment,” Putin said.

An anonymous source told Interfax-AVN news agency that Russia and Bangladesh are intensively building up their arms trade.

“Over the last few years alone, a shipment of MiG-29 fighters, several dozen BTR-80, BREM-K and BMM armoured personnel carriers, and three Mi-171Sh helicopters have been exported to that country. There are some new weapons contracts in the pipeline, but their signing is being delayed because Bangladesh does not have the money for it,” he said.

The source did not specify what these contracts deal with but noted that Bangladesh is taking interest in Russian air defence systems, helicopters, and combat hardware for ground forces.

The development of Russia-Bangladesh military-technical cooperation has been somewhat impeded by the fact that, at certain periods of time (under former Prime Minister Khaleda Zia), Bangladesh has had political tensions with India, which is a strategic importer of Russian arms, the source pointed out.

“The extension of a large loan to Bangladesh for buying Russian weapons may significantly bolster Russia’s position on this market,” he said, referring to China’s rivalry with Russia for Bangladesh’s weapons market.

So far, China has remained Bangladesh’s largest weapons supplier, accounting for more than half of the country’s arms purchases.

“China is a strong rival of Russia on Bangladesh's weapons market: the Bangladeshi army and fleet have mainly been armed with Chinese weapons and military hardware ever since Bangladesh became independent,” he said.

Commenting on the deal, Russian military analyst Igor Korotchenko said Bangladesh is likely to buy about 80 to 100 Russian-made BTR-80 amphibious armoured personnel carriers (APCs) and some missile defence systems.

“Also, taking into account that Bangladesh air forces currently operate MiG-29 fourth- generation fighter jets, a contract to repair and modernize the previously acquired aircraft is likely to be signed, as well as a possible deal to buy fighter jets of the modernized MiG-29SMT configuration,” Korotchenko said, adding that the purchase of the Mi-171 military helicopters is also possible.

Russia is also expanding its bilateral ties in the oil and gas sector. “Gazprom has signed a contract with the PetroBangla Corporation for drilling 10 gas fields. This project will increase gas production in Bangladesh to 56 million cubic metres,” Putin said.

Gazprom International said it had already started preparations for the project, and the drilling at two gas fields is due to begin within the next few weeks. The value of the deal was not officially disclosed, but media reports estimated it at about $193 million.

Space is another promising area of cooperation. “During the talks, we discussed the possibility of providing assistance to our Bangladeshi partners in launching telecommunications satellites,” he added.

During the talks, the sides stressed their commitment to develop mutually beneficial and comprehensive cooperation, focusing on the long-term, diversification of bilateral trade, increasing investment and establishing joint high-tech ventures.

Putin said the trade and economic relations between the two countries are developing at a “satisfactory pace,” stressing that in 2012, trade grew significantly by over 20 percent and amounted to more than $700 million.

“This is far from our full potential, as we have noted during the talks today. We have set ourselves an achievable target: to increase trade to $1 billion in the short term,” he said.

Dadan Upadhyay is an Indian journalist based in Moscow.

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