Bangladesh bridge avoids external debt trap, regional rivalries

Padma River project a key milestone for country keen to chart its own course

- Debarshi Dasgupta

Bangladesh will inaugurate a key bridge over the turbulent Padma River tomorrow, more than two decades after work on it first started and during which time financial, political as well as technological hurdles had threatened its completion.

The unveiling of the bridge – Bangladesh’s biggest infrastructure development project so far, and dubbed a “symbol of national pride” – marks a key milestone for the country.

But it also accentuates upcoming challenges for this South Asian country as it seeks to avoid debt-related risks and geopolitical rivalries associated with external borrowing and foreign collaboration necessary for Dhaka to complete other such high-profile projects.

While Dhaka engaged a Chinese company to build the bridge, its construction – estimated to have cost about US$3.9 billion (S$5.4 billion) – was funded entirely by the Bangladesh government.

The decision to steer clear of foreign funds sourced bilaterally or from multilateral agencies was seen as a bold move, especially after the World Bank withdrew its financial support of around US$1.2 billion for the project in 2012 amid corruption allegations that were later dismissed in court.

Encouraged by its growing economy and foreign exchange reserves, the Bangladesh government also rebuffed Chinese and Malaysian proposals to fund the bridge’s construction.