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BANGLADESH: Russian Arms Purchase and Disparate Exchange?

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By Dr. Peter Custers *

The continuation of a progressive historical relationship, or a deplorable departure from history? On January 15 last, Bangladesh’s Prime Minister Sheikh Hasina signed an agreement in Moscow towards the purchase of weapons’ systems from the Russian Federation.

Under the agreement Bangladesh reported will buy as much as seven types of arms for the country’s infantry including anti-tank missiles, and four types of armoury for the air force, including transport helicopters. The deal is worth 1 Billion US Dollars and is the biggest of its kind ever clinched by Bangladesh.

Given the size of the deal and its large financial implications, it understandably has aroused some controversy in the country’s media. Sure – this is not the first time Bangladesh has procured weaponry from Russia. Immediately after the country’s liberation war, Russia’s precursor had provided the country’s young air force with MG-19 fighter planes, and again during the nineties Bangladesh had been supplied with eight advanced MIG-29 fighter planes by Russia. In justifying the recent deal, Dhaka’s government has laid much emphasis on the fact that the then Soviet Union had been a loyal ally of the freedom fighters who valiantly fought the Pakistani army in 1971. Yet is it really correct to see the deal as a continuation of that heroic chapter in Bangladesh’s history?

To start, it is essential to emphasize that the defence deal of January 15 does not stand alone, but is a part of twin deals, - one on arms’ imports, the other one on the supply of Russian nuclear technology. There is in fact no secret about this, for the nuclear deal on construction of two reactors in Rooppur, Pabna, was also consolidated during Sheikh Hasina’s Moscow visit. Yet the international significance of this tie-up needs to be analyzed more deeply, more incisively, than most Dhaka commentators have cared to do so far. For the given type of double-deal is not a common feature of Russia’s Cold War strategies, but is a pattern that has been set by the framework nuclear agreement signed … between the United States and India, in 2008.

It is largely due to the alertness of Indian dailies that the full scope of the US’s intentions behind this framework agreement were revealed. In September of 2008, Delhi newspapers pointed out that the likely outcome of the deal would not just be 40 Billion Dollars in nuclear orders for Indian and foreign companies. No, the United States through the deal sought to ensure that American armament corporations - until then excluded from procurement orders of the Indian army - would be able to enter the field. When US President Obama visited New Delhi in November of 2010, US companies were reported to have bagged no less than forty percent of all military-commercial contracts signed in the intervening period.

The pattern set by the US-India nuclear agreement has since been emulated by other world powers in their dealings with India, notably by France and Russia, but the design is American nonetheless. Hence to justify the defence deal on grounds that Russia’s precursor had been a trusted ally in 1971 seems rather misplaced. But then Dhaka government officials will counter-argue and say that the similarity between US-India dealings and Russia-Bangladesh dealings only brings out Dhaka’s acuity in picking up on international trends.

Thus it is necessary to dig deeper and look at other aspects of the defence deal, before concluding on its real significance. One financial issue has been raised by the retired brigadier-general Shahedul Anam Khan. He has put the spotlights on the credit which Russia has granted to Bangladesh towards implementation of the 1 Billion Dollar deal. Apparently the interest rate on the loan has been fixed at 4 and a half percent. Indeed: the burden deriving from repayment obligations has implications for the government’s capacity to spend on public health and on other social programs essential towards alleviating poverty. Are the interests of the country’s army being prioritized, so one wonders, over those of the population at large – and such at a time when Bangladesh is not facing any serious war threat?

The aspect of the defence deal which seems the most questionable though, is that regarding the source to be tapped for financing the deal. At the time of the deal’s signing in Moscow, it was the Russian President Putin who openly referred to the tie-up between the arms’ sales and the contract which Russia’s energy giant Gazprom has signed with Petrobangla towards drilling ten gas wells. In Bangladesh’s media, Putin was quoted as having proudly highlighted Russia’s contribution towards increasing Bangladesh’s gas production, to 56 million cubic meters of gas per day. The Gazprom-Petrobangla agreement, as well known, was also clinched only recently, in April of last year. In appearance this is a case where Bangladesh is straightforwardly benefiting from the technical expertise of Russia’s global gas giant. Yet in the international press, Russia’s combined interest, in selling arms and in helping Bangladesh drill for gas, was interpreted differently. For here Russian officials were seen as confident about Bangladesh’s capacity to repay Russia’s 1 Billion Dollar loan in view of the country’s extensive offshore gas deposits.

And while this does not necessarily mean that Moscow is banking on exportation of natural gas by Bangladesh, - the Russian loan evidently will have to be repaid in international currency. Hence, in the final analysis the defense deal appears to be one more case of ‘disparate exchange’, i.e. of the international exchange of Northern weaponry against raw materials supplied by countries of the global South.

This latter interpretation is, of course, speculative since the precise financial configuration of the Russia-Bangladesh defense deal has to my knowledge not been stated publicly. However provisionally, it does not seems too far fledged to dismiss the references to Russia’s progressive role in supporting Bangladesh’s liberation war as pure rhetoric. Sure, Putin must have been happy to be reminded of the past by Bangladesh’s Prime Minister. Yet too much water has flown down the Ganges river since to warrant any reference to the Soviet Union’s 1971 stance. For not only is the tie-up between the nuclear and the defence deal modeled on the US’s 2008 deal with India.

The likely mode of financing the deal too is axed on US policymaking, i.e. on policies which the hegemonic power in the world system has pursued ever since the 1970s towards oil-rich countries of the Middle East. Policies which have fuelled conflict and bloody wars throughout the given region. Or am I simply wrong in presuming that the 2013 Moscow-Dhaka defence deal will be repaid with Bangladesh state revenue from extraction of natural gas and oil?

* Dr. Peter Custers, Leiden, the Netherlands, January 24, 2013


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