Bangladesh – why is Russia so interested?

Posted: January 15, 2013 in Middle East, Russia
Tags: , , , ,

Several articles about Bangladesh and Russia caught my attention today.

Russia grants Bangladesh $1 billion loan for weapons
MOSCOW | Tue Jan 15, 2013

PutinBangladeshPM(Reuters) – Russia, the world’s second-largest weapons exporter, has granted a $1 billion loan to Bangladesh for arms purchases, President Vladimir Putin said on Tuesday after talks with the country’s prime minister, Sheikh Hasina. (She is a fascinating person in her own right; daughter of the country’s founder.)

“Our countries intend to broaden military-technical cooperation,” Putin said, referring to weapons sales and servicing. He did not specify what weapons or military equipment Bangladesh would buy from Russia.

Russia will provide a separate $500 million loan to Bangladesh to help build its first nuclear power plant, Ruppur, under an agreement signed after the meeting, Putin said. (See more below)

“We will not only provide the most up-to-date technology … but we will also provide financial support for the construction of the nuclear power plant at the initial stage,” he said.

The head of Russian state nuclear corporation Rosatom, Sergei Kiriyenko, said technical and environmental assessments would be carried out this year for the plant, which is to have two 1,000-megawatt reactors and be completed in the early 2020s. He told reporters more loans would be required at later stages.

http://www.reuters.com/article/2013/01/15/us-russia-bangladesh-idUSBRE90E0HM20130115

“A separate part of the agreements saw Russia assign $500 million to finance the construction of Bangladesh’s first nuclear power plant.”

Russian President Vladimir Putin on Jan. 15 met the prime minister of Bangladesh for talks that included the signing of a $1 billion arms contract, the Asian nation’s biggest since its 1971 independence.

Bangladesh has recently been expanding its defense capabilities, building a new air base close to neighboring Myanmar and adding frigates to its navy.

“Our countries intend to expand their military and technological cooperation,” news agencies quoted Putin as telling Bangladeshi Prime Minister Sheikh Hasina during a Kremlin ceremony. “Russia will extend Bangladesh a credit of $1 billion, which will be spent on the purchase on Russian weapons and military technology,” the Russian leader said.

The arms purchase agreement included orders for armored vehicles and infantry weapons, air defense systems and Mi-17 transport helicopters, a source close to Russia’s state arms export agency told the Vedomosti business daily. The source said the purchase did not include any tank orders because Bangladesh had earlier obtained those from China.

Bangladesh also opted out of its initial plans to purchase eight advanced Mig-29 fighter jets because of their $500 million price tag.

A separate part of the agreements saw Russia assign $500 million to finance the construction of Bangladesh’s first nuclear power plant, to be built at a site called Rooppur. The two planned Rooppur reactors are expected to cost $4 billion, with Russia also agreeing to continue financing construction after the first phase of the project is complete, news reports said.

Bangladesh’s military spending spree follows the recent discovery of offshore natural gas deposits (see next article), which Russian officials believe means it will have no problems repaying the credit.

A.N.M Muniruzzaman, an analyst at the Dhaka-based Institute of Peace and Security Studies, told AFP it was the biggest defense deal ever to be signed by Bangladesh, which gained independence in 1971.

http://www.defensenews.com/article/20130115/DEFREG03/301150005/Russia-Bangladesh-Seal-1-Billion-Arms-Deal?odyssey=tab|topnews|text|FRONTPAGE

This follows Bangladesh’s recent purchase of tanks from China; click this link to read that article: http://thediplomat.com/flashpoints-blog/2011/06/30/bangladesh-eyes-china-arms/

Gazprom International to start drilling in Bangladesh
Voice of Russia, RIA

Gazprom International, an overseas subsidiary of Russia’s Gazprom energy holding, will begin commercial extraction at the Titas and Shrikail gas deposits in Bangladesh in the coming weeks.

The last preparations are being completed. A total of 10 boreholes will be drilled in Bangladesh under a $193-million deal between Gazprom and two local companies, BAPEX and BGFCL/SGFL (subsidiaries of the PetroBangla state-owned national oil company).

http://english.ruvr.ru/2013_01_15/Gazprom-International-to-start-drilling-in-Bangladesh/

Apparently Russia is expanding its trade with Bangladesh on several fronts, including the above. Read more:

Russia to expand trade with Bangladesh to $1 bln
Jan 15, 2013

Speaking after talks with Bangladeshi Prime Minister Sheikh Hasina in Moscow on Tuesday, Putin said that bringing bilateral trade to $1 billion was not unachievable, given last year’s increase of 20% to $700 million.

The two leaders issued a joint statement with Russia pledging to consider tariff privileges for Bangladeshi imports within the framework of the Customs Union of Russia, Belarus and Kazakhstan.

The document emphasizes the need for broader cooperation in the energy sector, including oil and gas exploration and development. Russia will loan Bangladesh $500 million for the construction of a nuclear power plant and $1 billion for the purchase of Russian weapons.

http://english.ruvr.ru/2013_01_15/Russia-to-expand-trade-with-Bangladesh-to-1-bln/

asia-map2So – what is the strategic importance of Bangladesh to Russia and others? Location, location, location, maybe? Click on the map to enlarge. Look south of China, between India and Burma.

This paragraph from the Wikipedia entry on Bangladesh may contain more clues:

The United States is a major development partner of Bangladesh, giving over six billion dollars in aid since 1972. American companies are the largest foreign investors in the country, and the US is also the largest market for Bangladeshi exports.

The Bangladesh government is planning construction of the largest deep sea port in South Asia at Sonadia Island. The 500 billion taka project will be completed in multiple phases and enable Bangladesh to service the whole region as a maritime transport and logistics hub.

India, China, Bhutan, Nepal and other neighbouring countries (and Russia?) will be able to take full advantage of the strategic location and Bangladesh’s LDC (least developed country) status for exporting their goods, which are manufactured in Bangladesh.

Furthermore, with $7.5 billion a new international airport will be constructed.

Additional expressways, freeways, fly-overs, overhead rapid transit system, high-speed modern trains, metro rail system, and high-speed electric powered intercity rail network are all planned.

Several other points of interest to me from Wikipedia:

Bangladesh is the most densely populated large country in the world.

60% of the population are aged 25 or younger.

Bangladesh is the second largest Muslim populated state after Indonesia with over 150 million. Islam is the state religion.

http://en.wikipedia.org/wiki/Bangladesh

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