By Ashis Biswas
KOLKATA: Bangladesh has reacted coolly to the recent official announcement that Bhutan and Bangladesh may buy coal from the CIL (Coal India ltd) directly, following recent steps taken to ease and increase regional trade. A Dhaka-based official said there were no immediate plans to buy coal from India.
Bangladesh was considering the purchase of coal from other countries, including South Africa. As for buying from India, the poor quality of its coal was a major problem, he said. The high sulphur and ash content in some varieties of coal produced in India has often been criticised by a section of importers.
CIL sources had earlier said that Bhutan could import coal from India with US dollars while Bangladesh could make payments using the local currency Taka.
Kolkata-based observers felt that the recent uneasiness in Indo-Bangla bilateral relations was one of the reasons why Bangladesh was not as keen as before to buy various Indian items. They expected that a decline in the volume of overall bilateral trade between the two countries could not be ruled out. Unless relations improved between Dhaka and Delhi after a new elected Government comes to power in Bangladesh after February 12 elections, achieving a growth in bilateral trade would not be easy.
However, the new interim government headed by Dr. M. Yunus running the administration in Bangladesh following an anti Awami League (AL) coup on Aug 5 1924, had announced a new approach in its foreign affairs formulations. Instead of the earlier India-centric foreign relations as pursued by the Awami League led government, Bangladesh, it was announced, would try to expand its contact with other countries regardless of their political character, in the short term.
This did not necessarily mean that India would be sidelined in bilateral trade, Dhaka officials said. But that is precisely what has happened during Dr. Yunus’s brief tenure. The stopgap policymakers led by Yunus, had gone out of their way to attract more trade, investment and business from Pakistan, Saudi Arabia and Turkiye. Bangladesh sought to procure significant quantities of rice and onions etc even at a premium from Pakistan to meet rising demands at home, while importing such items from India would have cost his country less.
As expected, common people began protesting against the growing double digit inflation and generally higher food and foodgrains prices.
As for the rising demand for coal, Bangladesh has little choice other than resorting to higher imports. The cost of fuel rose sharply in the context of the long drawn war in Ukraine. Meanwhile, Bangladesh’s domestic demand for power rose significantly. In particular, the production in the garments industry suffered .badly because of prolonged spells of load shedding.
The position of factories running in the other sectors of the economy was no better. But given its export dominated economy, Bangladesh could not afford a prolonged shortfall in production in the garments sector, which accounts for a hefty 85% of its overall export earnings.
This led to a major readjustment — almost a reversal of policy – where ensuring a reliable supply of fuel to generate power was concerned. As a major victim of global warming despite its minor industrial output, Bangladesh had not encouraged the use of coal as a fuel in recent years. During the long covid 19 pandemic, it had no choice, but to revert to using coal again to maintain its power generation.
By 2023, as coal from India and other countries was used increasingly replacing costly and uncertain supply of oil, its share in 2023 rose to 21% of total fuel used in Bangladesh, instead of only 7% a year ago, according to one report.
In another sense, it means that Bangladesh has been forced to reverse its earlier much appreciated policy of reducing the use of atmosphere polluting fossil fuels to generate power, against which it had always reacted vociferously in different world fora. Coal burning contributes to more pollution and global warming, but there is not much Bangladesh can do about it in the medium term. It must wait until the world political situation stabilises, accompanied by more effective conflict resolution. For the moment, Bangladesh can well emerge as one of the major coal importers in the world. (IPA Service)
