Bangladesh caught in the middle of US-Russia power struggle

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By Nazmul Ahasan on Jan 03, 2023 Benar News

Bangladesh is caught in the middle of the geopolitical battle between Russia and the United States over Ukraine and must walk a fine line to line to prevent an impact on its economy.

The South Asian nation does not want to strain ties with old friend Moscow, which is helping Dhaka build a U.S. $12.65 billion (1.3 trillion taka) nuclear power plant, but it balks at the idea of economic sanctions from Washington, which is a key recipient of many of its exports.

This tug of war played out recently when Bangladesh blocked a United States-sanctioned Russian ship loaded with cargo destined for the power plant from docking at a local port on Dec. 24. The ship has since docked at an Indian port, according to a Bangladesh official involved in the plant’s construction.

For Bangladesh’s government, it was a difficult decision to make.

Prime Minister Sheikh Hasina counts Russia as one of her strongest allies. The ties between her Awami League party and the Russian state date to Bangladesh’s war of independence in 1971, which the Soviet Union steadfastly supported.

Immediately after she returned to power following the 2008 election, Hasina signed a treaty with Russia to build the nuclear power plant. The costliest infrastructure project ever undertaken in Bangladesh, it has solidified the bilateral ties between the two countries.

In 2014 and 2018, Vladimir Putin returned the favor by congratulating Hasina on retaining power in controversial elections. The 2018 election was harshly criticized by Western democracies as rigged, while the 2014 one was boycotted by the main opposition party and its allies.

When Western countries imposed sanctions against Russia following its invasion of Ukraine in February 2022, Hasina repeatedly criticized them and vowed to go ahead with the nuclear project in Rooppur, in the northwestern Pabna district.

Her bureaucrats even mulled a currency-swap arrangement with Russia after some of its banks were delisted from the SWIFT mechanism, which facilitates international banking transactions. Russian ships, meanwhile, continued to deliver materials for the nuclear project.

But when push really came to shove, Bangladesh backtracked and denied the sanctioned Russian ship, Ursa Major (also known as the Sparta III), from docking in its port.

“Hasina’s position on the ship reflects the strategic importance that Dhaka attaches to its relations with Washington,” said Michael Kugelman, director of the South Asia Institute at the Wilson Center, a Washington think-tank.

“Yes, Dhaka is keen to ensure relations with Moscow, and yes, it is not afraid to signal its unhappiness about what it believes to be U.S. meddling in its politics,” Kugelman told BenarNews.

“But at the end of the day, Hasina won’t want to get complacent about relations with the U.S. and she will look for ways to signal Dhaka’s desire for a strong and sustained partnership.”

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Bangladesh Prime Minister Sheikh Hasina (left) and Russian President Vladimir Putin speak during a signing ceremony at the Kremlin in Moscow, Jan. 15, 2013. [Mikhail Metzel/pool/AP]

‘Workarounds’

Despite the setback, Bangladesh devised a workaround.

“The goods will be ferried via a third-party country’s ship so that the same situations don’t repeat,” Yeafesh Osman, the Bangladesh minister of Science and Technology, whose portfolio includes the nuclear plant, told BenarNews.

While the minister did not elaborate, BBC Bangla reported that Bangladesh initiated discussions with the Indian government to allow the goods to be unloaded there and then ferried to Bangladesh on a different ship.

A Bangladesh official with Rosatom, the Russian state corporation constructing the Rooppur nuclear plant, told BenarNews that Ursa Major had since docked at the Port of Kolkata, India. The official asked to remain anonymous because he is not authorized to speak for the corporation.

India’s Ministry of External Affairs did not respond to a BenarNews request for comment.

India has long defied the Western sanctions against Russia, buying oil and military equipment from the country. An analysis by Foreign Policy revealed in August 2022 that more than half a dozen sanctioned Russian ships docked in India during the previous month.

By involving India, Bangladesh may have hoped to buffer the risks, but Washington’s reaction to Dhaka’s action remains to be seen.

Meanwhile, India could theoretically be exposed to secondary sanctions, some analysts said, but the U.S. has so far been unwilling to enforce any penalties.

The Wilson Center’s Kugelman said that “despite the attempts at workarounds, Russian goods are coming to Bangladesh in ways that would appear to constitute a violation of sanctions.

“Does Washington consider its relationship with Dhaka to be sufficiently strategically significant that it can find ways to overlook these transactions with Moscow, even if they appear to violate sanctions,” Kugelman asked.

“If yes, then the U.S. and Bangladesh should be able to find a way out of this mess. If not, things could get even messier.”

Another analyst, Allen Maggard, with the Center for Advanced Defense Studies in Washington, said the Office of Foreign Assets Control at the U.S. Treasury Department “has a track record of pursuing individuals and companies engaged in ship-to-ship transfers for the benefit of North Korea and Iran.” But Bangladesh’s context may be different, he told BenarNews.

The U.S. Department of Treasury did not respond to a BenarNews request for comment.

Sanctions

While Science and Technology Minister Osman believes Bangladesh was overly cautious to avoid sanctions-related complications, the nation’s wariness is understandable.

The U.S. and Europe’s markets are lifelines for Bangladesh’s export-based economy.

On Dec. 10, 2021, to coincide with Human Rights Day, the U.S. government imposed unprecedented targeted sanctions against several commanders of Bangladesh’s Rapid Action Battalion (RAB), an elite police unit accused of rampant rights violations.

“Bangladesh has quietly made efforts to work with the U.S. to address Washington’s concerns about RAB that led that entity to be sanctioned by the U.S. one year ago,” Kugelman said.

“Dhaka wants to get things right with Washington even while continuing to engage commercially with Beijing and Moscow.”

Still, some in Bangladesh remain critical of the U.S. approach.

“It’s really concerning that a sanction imposed against Russia has such a ripple effect that it’s hurting development projects in countries like Bangladesh,” said Imtiaz Ahmed, an international relations professor at Dhaka University.

“The United States will not escape the long-term effect of how it sanctions one country after another. The affected countries will find alternative ways for their own sake, which will hurt the U.S. interests,” he said.

The Russian government would agree.

On Dec. 20, when the U.S. embassy alerted Bangladesh about the sanctioned ship, the Russian embassy in Dhaka immediately took the matter to the public, albeit indirectly.

It issued a rare, if not unprecedented, public statement accusing “developed democracies” of interfering in domestic affairs in countries such as Bangladesh while adding that Russia was “invariably committed” to non-interference.

The statement led Western embassies to ask if the Russian commitment to non-interference also applied to Ukraine.

In the following days, the Russian foreign ministry doubled down.

Maria Zakharova, the ministry’s chief spokeswoman, specifically referred to a recent meeting between the U.S. Ambassador to Bangladesh and family members of victims of enforced disappearance in the country.

She alleged the incident showed the U.S. was trying to “influence the domestic processes” in Bangladesh.

Zakharova said that by offering recommendations regarding transparency and inclusiveness in the parliamentary elections, Western countries violated “the basic principles of non-interference in the domestic affairs of sovereign states.”

The Russian position appeared to support the ruling party in Bangladesh, whose leaders routinely complain about U.S. positions on democracy and human rights.

But it wasn’t clear until last week that the quibbles about interference may have been less about Bangladesh’s domestic affairs than Russia’s own investment interests, leaving Dhaka in the midst of another tussle between big powers.

“We tend to think the most of how [Bangladesh has] been dragged into U.S.-China competition, but we’re seeing now how it’s also being brought into U.S.-Russia rivalry. That was to be expected, given Russia’s preexisting investments in Bangladesh’s energy industry,” Kugelman said.

“The challenge for Dhaka is to balance its important relations with Washington with its energy security and broader foreign policy interests. And that entails a flexible foreign policy with continued engagement with Moscow.”

Ahammad Foyez in Dhaka contributed to this report.