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Speech Transcripts

June 16, 2014

Speech at the 35th ODA Loan Agreements Signing Ceremony

Pan Pacific Sonargaon Dhaka Hotel, Dhaka, Bangladesh

It is my great honor to be here today to speak on behalf of the Japan International Cooperation Agency, or JICA. Japan began its support to Bangladesh immediately after Japan formally recognized the newly independent nation in early 1972. Starting from first dispatching 3 volunteers in 1973, we have been working together with the people of Bangladesh to accelerate sustainable economic growth with equity, bring people out of vulnerable life, and towards a middle income country.

Under this policy, we have been cooperating in almost all sectors across the country. In the last 41 years, we have extended more than 1 trillion JPY in loans and 500 billion JPY for grants, and 65 billion JPY for technical cooperation. More than 1,200 volunteers have worked in the country, while more than 11,000 Bangladeshi people have participated in our training programs of technical cooperation.

We at JICA are very proud of working together with the people and the government of Bangladesh in their efforts that have resulted in great achievements. And now, Bangladesh has become the third largest partner country of Japanese official development assistance, with remarkable improvement in poverty reduction, education, and health conditions. Bangladesh appears to be entering into a new stage of development fueled by faster economic growth. I believe that we have more to cooperate on at this juncture in Bangladesh.

Prime Ministers Hasina and Abe acknowledged this new development landscape during their summit on May 26th, when they committed to further strengthening bilateral cooperation through the "Japan-Bangladesh Comprehensive Partnership." Just as significantly, they discussed the "Bay of Bengal Industrial Growth Belt" initiative (or BIG-B for short). Prime ministers Hasina and Abe are right on the target, because BIG-B, a grand design to promote industrial agglomeration along the Dhaka-Chittagong-Cox's Bazar belt area, has a great potential under the currently on-going tectonic changes of the global economy.

Among the five projects included in JICA's 35th ODA Loan Package, Matarbari Ultra Super Critical Coal-fired Power Project is considered as one of the key projects to materializing the initiative. Today, I would like to talk about the background and important features of the concept of BIG-B, specifically highlighting the Matarbari project. Mr. Hataeda, Chief Representative of JICA Bangladesh Office, will explain the other projects later on.

The growth center of the world economy is now shifting from the Pacific to a much broader area which I call the Indo-Pacific region. The Pacific continues to play an important role, but it is being connected more and more with the emerging economic powers along the Indian Ocean from Southeast Asia to South Asia, and to Africa. And, of course, the Bay of Bengal is centrally located in this tectonic change as it can function as a key junction between the two oceans. Perhaps it is high time for the Bay of Bengal to be considered as a coherent strategic region within the broader framework of the Indo-Pacific. Bangladesh's renewed focus to "Look East" would be timely and appropriate in this sense.

Bangladesh, in other words, is the linchpin of the Indo-Pacific region. It stands to gain a great deal from the shift in global economic dynamism toward the Indian Ocean. Indeed, the BIG-B seeks to take full advantage of this trend. It foresees Bangladesh transcending its national borders to become a hub of the regional economy, so that she may reshape herself as a sparkling trading nation deeply incorporated into the inter-regional and global value chain networks as a node of the two regions. This is imperative for Bangladesh to leap from the current growth trajectory of around 6% per annum to 8 or even 10%, the growth rate required if the national target of becoming a middle-income country by 2021 is to be achieved.

BIG-B has three main pillars. The first pillar is industry and trade. This pillar mainly consists of constructing a long-awaited deep sea port at Matarbari Island. This will offer Bangladesh an important trade gateway to the rest of Asia and beyond. The second pillar is energy. Matarbari Island can be developed into a massive supply base of primary energy (such as coal, LNG, and oil). The electricity produced from those sources can support a quantum leap in industry and trade. Transportation is the third pillar. To enable greater industry, trade and energy production, the Dhaka-Chittagong -Cox's Bazar transport artery needs to be strengthened and even extended to neighboring countries.

BIG-B is also an appropriate strategy for Bangladesh in the sense that the country is now poised to capitalize on three promising economic opportunities. The first opportunity is still-competitive Bangladeshi labor in the global marketplace. The second opportunity is the current trend of regional integration. Regional Comprehensive Economic Partnership, or RCEP, which is currently being negotiated among ten ASEAN countries, Japan, China, South Korea, Australia, New Zealand and India, is one manifestation of this trend. Bangladesh could benefit more by joining in it. The third opportunity is the strategic location of Bangladesh, a country between the Indian Ocean and the Asian continent and a country between Southeast Asia and South Asia.

Bangladesh can provide a gateway to the ocean for Bengal regional economies and play a nodal role between Southeast Asia and South Asia. However, if Bangladesh is to make the most of these opportunities, it must overcome several important socio-economic challenges. Firstly, Bangladesh must confront a heavy energy resource deficit triggered by importing loads of coal, LNG and oil in the near future. This might jeopardize the country's entire macroeconomic stability. Second is the massive demand for employment. The key challenge is to prevent aspiring new entrants to the labor market from becoming an onus on society and to obtain the full benefit of the country's demographic bonus. Third is adaptation to upcoming changes related to the international trade regime. Bangladesh is expected to graduate from LDC (least developed countries) status in the near future. This means the termination of a variety of preferential trade treatments which Bangladesh currently enjoys. Last but not least, fundamental infrastructure development and establishment of sound governance are urgent needs.

The Government of Bangladesh and JICA have jointly identified the Matarbari area, located 60km south of Chittagong city, as the tipping point for carrying out BIG-B. This island and the surrounding area have all the potential to become an integrated industrial and trading hub as well as a central energy base. That is why we decided to extend support to the Matarbari project.

The project has two components, a 1200MW world-class-efficient and environmentally-most-friendly power plant, and the first-ever deep sea port in Bangladesh. Eventual expansion of the Mabarbari plant may include power plants adjacent to the planned units, construction of coal centers to service other coal-fired power plants, and even construction of a LNG terminal. In addition, the Government of Bangladesh and JICA are undertaking discussions to conduct a comprehensive master plan of the area, including Chittagong and Cox's Bazar. This will further clarify the shape of BIG-B.

Indeed, implementing all the projects under the 35th ODA Loan Package and moving toward the realization of BIG -B will pose a series of challenges for you. But they can be seen as unprecedented opportunities for change. There is much sea for Bangladesh to sail across, but JICA will be always with you. Let us set out on a new voyage for a brighter future.

Onek Dhonnobad, thank you very much.

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