What does America offer, exactly?

[Black_cats]

What does America offer, exactly?​

How many bridges, high speed rail and ports is the US going to build? Why should Bangladesh see China as its enemy?

What does America offer, exactly?

How many bridges, high speed rail and ports is the US going to build? Why should Bangladesh see China as its enemy?

www.dhakatribune.com

Photo taken on November 4, 2020 shows a general view of the Padma Bridge Syed Zakir Hossain/Dhaka Tribune

Farid Erkizia Bakht
January 29, 2022 12:39 AM

Washington, having allowed Delhi to be the arbiter of Dhaka's destiny for the best part of a decade, has suddenly expressed an interest in the future of Bangladesh.

To what end? Is it because it is miffed that there is way too much Chinese money pouring in? And if they got their way, what would be on offer?

Would they merely say: Be happy with the $4 to 5 billion goods trade deficit? Bangladesh sells around $7 billion in apparel. In return, the US sells less than $1 billion worth of machinery and steel. Very occasionally, it sells Boeings (700 million worth in 2019). Its biggest single item is a billion-dollar worth of agricultural products.

Then again, Germany, with a population only one quarter of the US, buys $6 billion-worth of stuff from Bangladesh.

You can see where the political pressure points are if there is a standoff and which local business magnates will be keen not to rock the apple (or apparel) cart.

China is the big challenge. Bangladesh only sells half a billion, but buys over $11 billion from China. There lies the grand opportunity.

But it requires a strategy and a change in attitude. If language is an issue, then where is the drive for widespread learning? Are local companies receiving sufficient support to participate much more in trade fairs or benefit from trade financing?

How is the campaign to join RCEP going? There is hardly any noise about this in the media or general conversation. Too many seem too content to look west for markets and only accept stuff (and bridges) from the east.

If you want to "arrive" by 2041, the way to do it is to start selling gear to the east.

All the while, China is constructing infrastructure in Bangladesh, vital for a modern, industrial economy.

Has America forgotten how to build?​

America's response to the Belt and Road Initiative (BRI) remains as promises in press conferences. Where is its Build Back Better, say, on the Bay of Bengal? A BBBBB or B5 project?

One obnoxious coal-friendly senator may be killing off Biden's flagship initiative in the US itself, but you can bet that if America came up with a real Marshall Plan for the Bay, any objecting political-wallah would be despatched to the Andamans forever.

But if it cannot rebuild in its own country, how can the US do so abroad?

I am not suggesting that Bengalis or Tamils are mercenary. It's just that they appreciate that roads, rail and bridges are the real world equivalent of the servers and cables of the digital world. Nothing moves without them.

And ideally, south Asia's people would really, really want to escape poverty and become moderately prosperous by 2047 (some even dream of 2041).

Show me the money​

In theory, the US could reduce its military budget by 300 billion a year and still outspend China and Russia combined. It could then put that 300 billion annual "peace dividend" into a budget for global development and climate change. Think of the soft power and eternal gratitude. But it cannot.

Here is the thing. Money only becomes available when defense and missile manufacturers get to see it. American bridges may rust away but Raytheon has its very own secretary in office. Congress is on the payroll, so to speak, too.

One might say that China and Japan even help pay for the Pentagon indirectly. The US has been the world's largest debtor since August 15, 1971, when Nixon delinked the dollar from gold.

China alone owns a trillion-dollar worth of treasury bonds. Wars in Asia (Korea and Vietnam) destroyed the creditor status of the US but not its credit rating.

The World Bank and IMF normally tell states which are deep in debt that they have to cut budgets, implement austerity, and repay debt. However, they don't pressure Washington like they do Buenos Aires, Islamabad (and a hundred other capitals).

Instead, the US sells treasury bonds (IOUs ) and the world lends them the money. Why? Because we live in a dollar denominated world. It's always a free roast lunch for the US and thin gruel for the rest.

But they now have a problem. Because America has off-shored much of its industry, when it signed off pandemic stimulus checks for a few trillion dollars, its citizens pressed "buy" on their screens and the factories in China (not America) cranked up the machines to produce all those smart TVs and must-have stuff.

China had a trade surplus of $677 billion last year, and a record foreign trade of $6 trillion.

The US is an increasingly hollowed out, financialized economy. It’s one saving grace is that it continues to control the global financial system. It threatens to cut Russia off the SWIFT financial network. There are discernable signs of an alternative forming. The Chinese and Russians are quietly constructing and connecting their own versions (CIPS and SBFS, respectively).

China has no intention of making the renminbi a reserve currency. However, this decade we will see ever larger volumes of trade of Iranian and Russian energy, resources, and products with China, in their currencies or yuan (definitely not the dollar).

With RCEP set to become the core of the global economy, one can envisage similar moves in east, southeast Asia and maybe south Asia lubricating regional supply chains. That is when the fun will begin.

This helps explain why America is on a permanent war footing. Its language is all democracy, rights, and rule of law, but its actions revolve around military alliances, economic sanctions, and regime change.

Blinken would be ecstatic if Dhaka were to join Delhi in a containment strategy against China. But what on Earth is in it for Bangladesh in that misadventure?

Farid Erkizia Bakht is a political analyst. @liquid_borders

 

[mb444]

I would add a slightly differing perspective to the numbers cited in the article. BD RMG exports are subject to tax of 15%. So against $7bn BD export the US generates over $1bn in revenue.

US is not buying anything from us as a favour. Its buyers are private firms. Here in lies a simple truth.... US has many leverages but they are not as powerful as we perceive them to be. The US government can not really use the trade deficit in the bargaining process.

BD should bargain hard, what is US trade deficit against china, its massive... live goes on.

BD has ample room for maneuver. BD need not join the quad and even if it does it can do in name only. BD does not have the military assets to really assist the quad.

BDs economic engagement with china need not be risked. If US or Its proxies want to economically engage with us, we should welcome them with open arms, there are enough opportunities for everyone alongside china.

BD should continue to massage its position and delfty pivot as required as many time it is required. It is the game and as mandolorian would say, it is the way.

 

[Homo Sapiens]

I would add a slightly differing perspective to the numbers cited in the article. BD RMG exports are subject to tax of 15%. So against $7bn BD export the US generates over $1bn in revenue.

I have seen many posters here insists that Bangladesh's economic growth is all about western countries giving Bangladesh made garments product duty free access for being an LDC and once Bangladesh graduate from LDC, this benefit will be withdrawn and Bangladesh's entire ''growth bubble'' will vanish. But the truth is Bangladesh do not get any significant benefit in exporting garments products in any market other than EU(GSP) for being an LDC, infact Bangladesh faces highest tariff in US market, much higher than Non-LDC competitors like Vietnam or India. Still we manage to export 7 billion Dollar worth of garments there. This shows, Bangladesh's export footed on relatively robust footing than many people thinks.

 

[Beast]

I hope people do not see blindly as between export and import value. Some see import as bad and export as good.

If an import can reduced inflation, help competitiveness like reducing business start up and cost. For example , cheaper and equal quality and capabilities machinery compare to western product which are 3x-4x more expensive for no reason. That import is as essential as export value.

India crying about boycott made in China but still increase import from China every year. Not becos they love China but they can't. Many small India business need cheaper machinery and product to reduce cost and allow their business to stay alive. Those business will never survive if they replace made in China with western product which increase their cost that makes them out of business.

 

[Destranator]

I would add a slightly differing perspective to the numbers cited in the article. BD RMG exports are subject to tax of 15%. So against $7bn BD export the US generates over $1bn in revenue.

US is not buying anything from us as a favour. Its buyers are private firms. Here in lies a simple truth.... US has many leverages but they are not as powerful as we perceive them to be. The US government can not really use the trade deficit in the bargaining process.

BD should bargain hard, what is US trade deficit against china, its massive... live goes on.

BD has ample room for maneuver. BD need not join the quad and even if it does it can do in name only. BD does not have the military assets to really assist the quad.

BDs economic engagement with china need not be risked. If US or Its proxies want to economically engage with us, we should welcome them with open arms, there are enough opportunities for everyone alongside china.

BD should continue to massage its position and delfty pivot as required as many time it is required. It is the game and as mandolorian would say, it is the way.

The American retailers who buy from BD have the US exec and legislative branches in their pockets. Any restriction on BD RMG will have consequences for American elected representatives.
Having said that, we should not let this make us complacent: We must continue to diversify our export basket and destinations.

 

[Bilal9]

Bangladesh has no preferential quota in US for exports. Still - apparel exports keep increasing every year.

 

[Viet]

What does America offer, exactly?​

How many bridges, high speed rail and ports is the US going to build? Why should Bangladesh see China as its enemy?

What does America offer, exactly?

How many bridges, high speed rail and ports is the US going to build? Why should Bangladesh see China as its enemy?

www.dhakatribune.com

Photo taken on November 4, 2020 shows a general view of the Padma Bridge Syed Zakir Hossain/Dhaka Tribune

Farid Erkizia Bakht
January 29, 2022 12:39 AM

Washington, having allowed Delhi to be the arbiter of Dhaka's destiny for the best part of a decade, has suddenly expressed an interest in the future of Bangladesh.

To what end? Is it because it is miffed that there is way too much Chinese money pouring in? And if they got their way, what would be on offer?

Would they merely say: Be happy with the $4 to 5 billion goods trade deficit? Bangladesh sells around $7 billion in apparel. In return, the US sells less than $1 billion worth of machinery and steel. Very occasionally, it sells Boeings (700 million worth in 2019). Its biggest single item is a billion-dollar worth of agricultural products.

Then again, Germany, with a population only one quarter of the US, buys $6 billion-worth of stuff from Bangladesh.

You can see where the political pressure points are if there is a standoff and which local business magnates will be keen not to rock the apple (or apparel) cart.

China is the big challenge. Bangladesh only sells half a billion, but buys over $11 billion from China. There lies the grand opportunity.

But it requires a strategy and a change in attitude. If language is an issue, then where is the drive for widespread learning? Are local companies receiving sufficient support to participate much more in trade fairs or benefit from trade financing?

How is the campaign to join RCEP going? There is hardly any noise about this in the media or general conversation. Too many seem too content to look west for markets and only accept stuff (and bridges) from the east.

If you want to "arrive" by 2041, the way to do it is to start selling gear to the east.

All the while, China is constructing infrastructure in Bangladesh, vital for a modern, industrial economy.

Has America forgotten how to build?​

America's response to the Belt and Road Initiative (BRI) remains as promises in press conferences. Where is its Build Back Better, say, on the Bay of Bengal? A BBBBB or B5 project?

One obnoxious coal-friendly senator may be killing off Biden's flagship initiative in the US itself, but you can bet that if America came up with a real Marshall Plan for the Bay, any objecting political-wallah would be despatched to the Andamans forever.

But if it cannot rebuild in its own country, how can the US do so abroad?

I am not suggesting that Bengalis or Tamils are mercenary. It's just that they appreciate that roads, rail and bridges are the real world equivalent of the servers and cables of the digital world. Nothing moves without them.

And ideally, south Asia's people would really, really want to escape poverty and become moderately prosperous by 2047 (some even dream of 2041).

Show me the money​

In theory, the US could reduce its military budget by 300 billion a year and still outspend China and Russia combined. It could then put that 300 billion annual "peace dividend" into a budget for global development and climate change. Think of the soft power and eternal gratitude. But it cannot.

Here is the thing. Money only becomes available when defense and missile manufacturers get to see it. American bridges may rust away but Raytheon has its very own secretary in office. Congress is on the payroll, so to speak, too.

One might say that China and Japan even help pay for the Pentagon indirectly. The US has been the world's largest debtor since August 15, 1971, when Nixon delinked the dollar from gold.

China alone owns a trillion-dollar worth of treasury bonds. Wars in Asia (Korea and Vietnam) destroyed the creditor status of the US but not its credit rating.

The World Bank and IMF normally tell states which are deep in debt that they have to cut budgets, implement austerity, and repay debt. However, they don't pressure Washington like they do Buenos Aires, Islamabad (and a hundred other capitals).

Instead, the US sells treasury bonds (IOUs ) and the world lends them the money. Why? Because we live in a dollar denominated world. It's always a free roast lunch for the US and thin gruel for the rest.

But they now have a problem. Because America has off-shored much of its industry, when it signed off pandemic stimulus checks for a few trillion dollars, its citizens pressed "buy" on their screens and the factories in China (not America) cranked up the machines to produce all those smart TVs and must-have stuff.

China had a trade surplus of $677 billion last year, and a record foreign trade of $6 trillion.

The US is an increasingly hollowed out, financialized economy. It’s one saving grace is that it continues to control the global financial system. It threatens to cut Russia off the SWIFT financial network. There are discernable signs of an alternative forming. The Chinese and Russians are quietly constructing and connecting their own versions (CIPS and SBFS, respectively).

China has no intention of making the renminbi a reserve currency. However, this decade we will see ever larger volumes of trade of Iranian and Russian energy, resources, and products with China, in their currencies or yuan (definitely not the dollar).

With RCEP set to become the core of the global economy, one can envisage similar moves in east, southeast Asia and maybe south Asia lubricating regional supply chains. That is when the fun will begin.

This helps explain why America is on a permanent war footing. Its language is all democracy, rights, and rule of law, but its actions revolve around military alliances, economic sanctions, and regime change.

Blinken would be ecstatic if Dhaka were to join Delhi in a containment strategy against China. But what on Earth is in it for Bangladesh in that misadventure?

Farid Erkizia Bakht is a political analyst. @liquid_borders

Very simplified article
The world is not black nor white.
China is good, America bad. Or vice versa.
We live in a world where big eats small. China and US may give you a bonbons but at the end of the day want to increase their wellbeing on costs of others. In terms of doing business they are same, meaning professional they just differ in shades.
Thinking otherwise is naive.

 

[Bilal9]

I hope people do not see blindly as between export and import value. Some see import as bad and export as good.

If an import can reduced inflation, help competitiveness like reducing business start up and cost. For example , cheaper and equal quality and capabilities machinery compare to western product which are 3x-4x more expensive for no reason. That import is as essential as export value.

India crying about boycott made in China but still increase import from China every year. Not becos they love China but they can't. Many small India business need cheaper machinery and product to reduce cost and allow their business to stay alive. Those business will never survive if they replace made in China with western product which increase their cost that makes them out of business.

A lot of the Chinese imports to Bangladesh are industrial production inputs, machinery for industry/construction/agriculture, raw materials like cotton and polyester fiber. So imports are there to process and re-export mostly. Just like Vietnam.

 

[Species]

US and China work in two different ways.

China prefers G2G deals, doesn't care how you spend the money but make sure you pay the loans on time.

For the US, it's the private sector which makes the deals and corruption, investment climate would all be considered before signing the them.

 

[VikingRaider]

I have seen many posters here insists that Bangladesh's economic growth is all about western countries giving Bangladesh made garments product duty free access for being an LDC and once Bangladesh graduate from LDC, this benefit will be withdrawn and Bangladesh's entire ''growth bubble'' will vanish. But the truth is Bangladesh do not get any significant benefit in exporting garments products in any market other than EU(GSP) for being an LDC, infact Bangladesh faces highest tariff in US market, much higher than Non-LDC competitors like Vietnam or India. Still we manage to export 7 billion Dollar worth of garments there. This shows, Bangladesh's export footed on relatively robust footing than many people thinks.

Well said. This article suggested that US revoked GSP in 2013 after Rana Plaza incident. So it's been eight years!

Bangladesh still denied GSP privileges by US

US refuses to re-admit country to the GSP, citing concerns over labour reforms

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