Thursday, 1 June, 2023

Matarbari Deep-sea Port Can Transform Regional Growth Dynamics

  • Dr. Sabera Chowdhury
  • 16th May, 2023 06:40:16 PM
  • Print news
Matarbari Deep-sea Port Can Transform Regional Growth Dynamics

Since gaining their independence in 1971, Bangladeshis have lamented the lack of a deep-sea port comparable to those of Singapore, Sri Lanka, Malaysia, or India. The long-held ambition of a deep-sea port is gradually becoming a reality after 52 years of independence. Bangladesh is building a deep seaport at Cox's Bazar with funding from the Japan International Cooperation Agency (JICA) to assist the nation in handling expanding volumes of exports and imports and relieve strain on the country's main seaport, Chattogram. Experts anticipate that Matarbari will soon surpass all other export-import hubs in the South Asian region in importance.

With the pandemic almost retreating, the dream deep-sea port project's construction work is going on in full swing. As part of the Matarbari Deep-Sea Port Development Project, a coal-fired power station, an LNG terminal, and roads will be built. The handling capacity is planned to increase significantly in the second phase from the first phase's handling capacity of up to 1 million twenty-foot equivalent units (TEUs). The project is likely to be completed by 2026. The Owusu Maru, a Panama ship with a 13-meter draught and a 228-meter length, docked at the deep-sea jetty of the Matarbari coal-fired power station on April 25 before the building work was finished, setting a record for the largest ship ever berthed at any port in the country.

The Matarbari deep-sea port project has the potential to improve regional trade ties, boost investment, create jobs, and support infrastructural development, spurring economic growth for Bangladesh, Northeast India (India), Nepal, and Bhutan, as well as the surrounding areas of the Bay of Bengal.

The port is intended to serve as a significant transhipment hub linking Bangladesh with other countries in the area, boosting trade and business operations. Former Japanese Prime Minister Shinzo Abe proposed the concept of an industrial hub in Bangladesh in 2020, centered on the construction of a deep-sea port in Matarbari. The Bay of Bengal region would benefit from the promotion of an industrial hub, which will promote development and help millions of people escape poverty, thanks to a recent $1.27 billion commitment from the country's current Prime Minister, Kishida.

A fertile hinterland of agricultural and mineral resources exists in the deltaic region to the north of the Bay of Bengal, waiting to be exploited. Road and rail connectivity to the deep-sea port might boost commerce and economic activity, potentially resulting in the formation of a future industrial growth belt comparable to those in East Asia. The region's economic landscape might be strengthened by infrastructure investments by luring private capital, multinational corporations, and mobile industries to the area. Emerging Asia, the world's fastest-growing region, could do business and invest in an industrial powerhouse in the Bay of Bengal.

Currently, no goods are shipped directly from Bangladesh to Europe. The cargo containers first travel to ports in Malaysia, Singapore, and Colombo. Later, it awaits a mother ship departing for Europe. As a result, shipping import-export commodities becomes much more expensive and time-consuming. Export goods will be able to travel directly from Matarbari to any port in Europe or America once the seaport is finished. The cost of doing business will go down as a result. For instance, currently, goods shipping from Bangladesh to the USA take 45 days to arrive. If the Matarbari port is opened, it will take just 23 days to get to the intended location.

The distance between Matarbari and other ports won't be too significant if a deep-sea port is built there. The maritime distances from Chittagong to Matarbari are 34 nautical miles; 190 nautical miles from Payra port to Matarbari; and 240 nautical miles from Mongla Port to the deep-sea port. As a result, products can be quickly moved to other ports by road and sea after being unloaded from the mother vessel (a huge container ship) at Matarbari.

If Matarbari Port is fully functional, it will contribute positively to the country's economy. JICA estimates that, as compared to Chittagong port, Matarbari terminal will save $131 on each 20-foot-long container delivered by sea. Additionally, a 40-foot container also saves roughly $197. According to statistics, the deep-sea port will boost the country's economy by 2–3 percent.

Not just for the economy of Bangladesh but for all the economies in the Bay of Bengal area, a deep-sea port off the coast of Chattogram could be a game changer. The entire region along the Bay of Bengal's coast and its hinterland, which includes Bangladesh, North-East India, Nepal, and Bhutan, as well as the rest of India, might benefit from an increase in trade, industry, and commerce. The following are some potential opportunities for regional economic development provided by the Matarbari deep-sea port project:

a) The deep-sea port would draw international shipping lines and develop into an important entry point for industries trading with countries in the vicinity. It is anticipated that this will lead to an increase in cross-border trade and business operations.

b) The project would need a sizable workforce to run, in addition to the boost it would give to local economic activity, which would result in sizable employment and income in the area.

c) The Matarbari deep-sea port will make it simple for businesses in the Bay of Bengal region to access international markets. It would be inevitable for Bangladesh to evolve into an industrial hub with Matarbari as its focal point.

d) The port project will necessitate the building of supporting infrastructure, including road, rail, and river networks, as well as other necessary amenities, enhancing intra-regional connections and sparking commercial activity for quick expansion.

In contrast to ASEAN and the European Union, South Asia has not undergone much regional trade integration. Even Bangladesh-India trade relations suffer numerous obstacles that prevent them from fully benefiting from greater trade integration between the two nations. As a result, due to a lack of trade and investment cooperation, the geographic advantage given by easy physical access to each other's markets and the resulting low transit cost of commerce have not been fully leveraged. Matarbari might alter that with complementary trade and infrastructure investment.

There are areas in India and Bangladesh that are primarily landlocked, heavily agricultural, have a higher than average rate of poverty, and are more susceptible to natural calamities. While several institutional and governmental restraints play a role in this phenomenon, research indicates that geographic distance from growth centers and vulnerability to natural catastrophes are two important contributing factors to the problems of the lagging regions.

Lack of infrastructure or fragmented infrastructure as well as trade restrictions and hurdles across borders, frequently results in isolation from growth centers. As an illustration, the eight states of North-East India (NEI) are cut off from India's economic hubs because of their physical distance, high transportation costs, and restricted transit options. Bangladesh’s growth impacts can reach NEI in a meaningful way in the years to come. However, increased trade and investment between Bangladesh and NEI via transit access to Bangladesh sea ports, not just for NEI but also for Nepal, Bhutan, and the littoral states surrounding the Bay of Bengal, can stimulate economic growth in the region. Finally, it can be said that the Matarbari deep-sea port could be a game changer for development in the Bay of Bengal region.

 (The writer is Senior Researcher at South Asian Studies, University of Toronto, Canada)

Source: Sun Editorial