BIG-B: What’s in it for Bangladesh?

In the spring of 2014, in a meeting room in Tokyo, an idea was born with an unwieldy name: the Bay of Bengal Industrial Growth Belt. It soon shrank, as such ideas do, into an acronym — BIG-B. Japan’s Prime Minister Shinzo Abe, sitting across from the then Bangladesh prime minister Sheikh Hasina, put a number on it: 600 billion yen, then roughly $6 billion, to be delivered over four to five years, mostly as concessional loans. The ambition rested on three legs — economic infrastructure, a better investment climate and connectivity. At its heart lay Matarbari, a stretch of Cox’s Bazar coastline where a power plant, a deep-sea port and an industrial zone were meant to rise together.

Twelve years later, on October 27, the idea got a new coat of paint. Meeting in Tokyo, Prime Minister Tarique Rahman and his Japanese counterpart, Sanae Takaichi, relaunched it as “BIG-B for Shared Prosperity.” The new version stands on four pillars: connectivity; preparedness for disasters and geopolitical risk; public-private partnership; and cooperation for peace and stability. 

The joint statement speaks of turning the Bay of Bengal, with Bangladesh as its hub, into a region of shared prosperity. And it came with a headline figure: Japanese private investment in Bangladesh could reach up to one trillion yen ($6.3 billion) over the next five years, creating some 200,000 jobs.

It sounds alluring. But as with any grand regional design, the most useful question is also the simplest one: who wants what here — and where, in all of this, is Bangladesh’s share?

Japan’s interest operates on three levels. The first is commercial arithmetic. A deep-sea port lives or dies by its hinterland — the size of the territory whose goods flow in and out through it. With Chattogram, Mongla and Payra already nearby, Bangladeshi cargo alone may struggle to fill Matarbari to capacity. Add India’s landlocked northeast, and perhaps Nepal and Bhutan, and the numbers begin to work. That is precisely what Fumio Kishida, then Japan’s prime minister, proposed in New Delhi in 2023: an industrial value chain linking the Bay of Bengal with India’s northeast, in which raw materials from the northeast would be processed in Bangladesh and shipped to the world through Matarbari. For Tokyo, in other words, regional access is not a separate goal. It is the business case for the port.

The second level is strategic. A central aim of Japan’s Free and Open Indo-Pacific vision is to offer the region an alternative to China’s Belt and Road. A deep-sea port in the Bay of Bengal, built with Japanese money to Japanese standards, anchors Tokyo’s presence in waters where the competition is anything but theoretical. A Chinese state-owned company has already been handed the development of an economic zone at Mongla, and next door, in Myanmar, China is building a port of its own.

The third level belongs to Japanese companies: construction and consultancy contracts, energy business for firms such as JERA, and industrial zones where Japanese manufacturers can build supply chains beyond China’s reach. Sumitomo is developing a special economic zone at Araihazar; Toyota has said it plans to have a vehicle plant in full production by 2029. 

Put together, Japan’s ideal picture is simple: the port gets built, Bangladesh carries the loan, and the whole region uses it. There is nothing sinister about this; every country pursues its interests. 

The only question is how clearly Bangladesh sees its own.

India sits at the centre of this picture. Its seven northeastern states are tethered to the rest of the country only by the Siliguri Corridor, a sliver of land so narrow it is known as the “chicken’s neck.” Goods from the northeast must travel a long, circuitous road around Bangladesh to reach the sea; a route through Bangladesh would shorten that journey many times over. India’s own alternative — a route through Myanmar’s Sittwe port — remains stalled by that country’s civil war, which only adds to Bangladesh’s importance.

Nor is this a new conversation. Through a letter of intent in 2015, an agreement in 2018 and standard operating procedures signed in 2019, India secured the right to use Chattogram and Mongla ports. During a trial run in 2020, Indian cargo paid Tk 20 per tonne in transshipment fees, 100 taka in security fees and 50 taka in escort fees. Dhaka proposed a road-use charge of 2 taka per tonne per kilometre; New Delhi asked for it to be lowered. Matarbari could become a far larger version of the same story.

But experience has also revealed an asymmetry. In March 2025, on a visit to China, the head of Bangladesh’s interim government described India’s northeast as landlocked and Bangladesh as the region’s only guardian of the sea. Within days, on April 8, India abruptly withdrew a facility, in place since 2020, that had allowed Bangladeshi exports to pass through Indian land ports and airports on their way to third countries. New Delhi cited congestion; the timing told its own story. 

The lesson is plain: however economic connectivity may look on paper, it rests on politics — and the larger partner can close the door unilaterally. Any conversation about giving India access to Matarbari is therefore incomplete without the question of reciprocity.

So what is in it for Bangladesh?

The upside is too large to dismiss. Some 350 Japanese companies operate in the country, yet their combined direct investment still sits below $500 million. Even a fraction of the promised trillion yen would mark the largest leap in Japanese investment in Bangladesh’s history. 

Once the Economic Partnership Agreement takes effect, 7,379 Bangladeshi products will enter Japan duty-free — a cushion against the tariff preferences the country stands to lose after graduating from least-developed-country status. And if Matarbari truly becomes a regional hub, an entire economy could grow around it: port fees, logistics, warehousing, processing industries and jobs — much as Singapore and Dubai turned geography into fortune.

The risks, however, are just as real. 

The first is debt. The approved cost of the Matarbari port and its connecting road is 17,777 crore taka, of which 12,892 crore taka is a JICA loan. Bangladesh will repay it — and the interest rate on new JICA lending now stands at 3.5 percent, against 0.1 percent barely a decade ago. If the bulk of the port’s benefits flows to transit users and foreign firms while fees stay low, the bill will be Bangladesh’s and the profit of someone else’s. 

The second risk is an underused asset. Should regional cargo get stuck in politics, customs red tape or bilateral friction, Bangladesh would be left holding an expensive, half-empty port and the debt that built it. That is the real lesson of Sri Lanka’s Hambantota: the danger lies not in whose loan it is, but in debt saddled on a port that does not earn.

The third risk concerns geopolitical balance. China is Bangladesh’s largest source of imports. If BIG-B comes to be seen openly as part of a Japanese-Indian strategic design, the room for manoeuvre among great powers — the balancing act that has served Bangladesh well — could narrow. 

The fourth risk is domestic politics. Transit for India has long been one of the most sensitive subjects in Bangladesh. Before the visit, an Indian news portal, citing unnamed sources, claimed that financing for Matarbari was tied to a transit corridor for India. Neither government has confirmed it, and the official outcomes make no mention of it. But reports of this kind show how quickly opacity can breed uncertainty — and unrest.

What, then, should Bangladesh do?

First, treat BIG-B not as a package but as a series of separate decisions. If financing for the port, Japanese private investment and transit for India are bundled together, Bangladesh enters the negotiation from the weakest position, because it is the party that needs the loan most. 

Second, build Matarbari first as a successful port for Bangladesh’s own trade and industry, so that regional cargo becomes additional income rather than a condition of survival. 

Third, set transit fees on the basis of real costs, road wear and a fair return — not as a political courtesy. 

Fourth, insist on reciprocity: if India wants to reach the sea through Bangladesh, Bangladesh should have assured use of Indian land and ports for trade with Nepal and Bhutan and for exports to third countries, in a form that cannot be switched off overnight. 

Fifth, transparency: put the terms of loan and transit agreements before parliament. A deal that cannot stand up in public will not stand up politically either.

BIG-B is a rare opportunity, because the great powers of today’s world are turning their gaze to the Bay of Bengal, and Bangladesh sits on its shore. But geography is not an asset in itself; it becomes one only when its price is collected at the negotiating table. 

Japan knows what it wants. So does India. The real test of BIG-B is whether Bangladesh can say, just as clearly, what it wants.

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***Murad Kibria is a writer and chartered accountant.