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Wednesday, January 16, 2013
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$1b defence deal sealed

Dhaka, Moscow also sign nuke plant, 7 other agreements; agree to fight terrorism together

Prime Minister Sheikh Hasina talks to Russian President Vladimir Putin during a joint press briefing at the Kremlin, Moscow, yesterday. Photo: PID

Dhaka and Moscow yesterday signed a $1 billion deal under which Bangladesh would procure military equipment and arms from Russia.

Prime Minister Sheikh Hasina and Russian President Vladimir Putin witnessed the signing ceremony held at the Kremlin in Moscow.

This is the second trip by a Bangladesh prime minister to the Russian Federation. In March 1972, Hasina's father Bangabandhu Sheikh Mujibur Rahman visited the country, then Soviet Union, at the invitation of Brezhnev.

"Our countries intend to expand military and technological cooperation," news agencies quoted Putin as telling Sheikh Hasina during the Kremlin ceremony.

"Russia will extend Bangladesh a credit of $1 billion, which will be spent on the purchase on Russian weapons and military technology," said the leader of the world's second-largest weapons exporter.

The arms purchase agreement includes orders for armoured vehicles and infantry weapons, air defence 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 has recently been expanding its defence capabilities, building a new air base close to neighbouring Myanmar and adding frigates to its navy, AFP reports.

The two countries also signed two other agreements and six memoranda of understanding (MoU) on cooperation in different fields like agriculture, public health, medical science, education, counterterrorism, culture, law, justice and parliamentary affairs.

A part of the agreements saw Russia assign $500 million to finance the construction of Bangladesh's first nuclear power plant to be built at Rooppur.

"The 2,000-MW nuclear power plant in Bangladesh, with Russian technical and financial support, is a shinning example of our deeper engagement," Hasina said at a joint press briefing.

Referring to the agreements and MoU, she said, "I believe, they would place our relationship on a firm footing and help in taking practical initiatives in the future."

The preparatory work on the nuclear power plant would now allow us to make arrangements for the establishments of the plant, Hasina said.

The friendship between Bangladesh and Russia would reach to a new height, the PM said, adding, "A new door of prospect has opened by this visit."

Sheikh Hasina, who left for Russia on Monday, said she talked to President Putin in an atmosphere of great warmth.

“Our discussion was between two friends. I assured him of Bangladesh's friendship and cooperation in mutually beneficial areas. We realise that the result-oriented economic cooperation should be on the basis of our engagement with Russia in the WTO.

“We requested for duty-free quota-free access for Bangladeshi exports to the Russian Federation and in the Customs Union. It would open up doors for our private sector to explore new potentials for collaboration,” she added.

Hasina recalled the help and assistance provided by the then Soviet Union during and after the Liberation War.

In recognition, last year Dhaka bestowed Bangladesh Liberation War honour and Friends of Liberation War honour to many of those who were involved, she noted.

The PM, who is on a three-day trip, said she invited the Russian president to visit Bangladesh and he accepted it.

Addressing the press, Russian President Putin said they had constructive talks and hoped that the bilateral relations of the two countries would reach a new height.

The economic relations between the two countries, he said, had grown 23 percent and now it stood at more than $700 million. "We are placing emphasis to reach one billion dollars."

The Russian president mentioned his country is interested to increase cooperation in other energy sectors. In this connection, he mentioned of gas sector, reports BSS.

During a previous meeting in November 2010 in St Petersburg, Hasina and Putin agreed to take additional steps to bring the bilateral relations to a new level, according to a statement posted on the official website of Kremlin.

“Our countries are implementing various major joint projects, including in the energy sector,” Putin said, adding that Russian state nuclear corporation was getting ready to build the Rooppur nuclear power station, the first NPP in Bangladesh.

“In fact, Russia will not only supply the latest technology, which is natural, just as we do in our own country and in other countries, but we will also provide financial support at the initial stage of construction.

“It will be a loan for $500 million, and you have just witnessed the signing of the relevant agreement,” added the president.

Talking on cooperation in other energy sectors, he noted, 20 percent of all electricity generation capacity in Bangladesh was built with the assistance of Russian experts.

Putin said his country is expanding ties in the oil and gas sector.

Russian energy giant Gazprom has signed a contract with the Petrobangla for drilling ten gas wells, he mentioned. “This project will increase gas production in Bangladesh to 56 million cubic metres of gas per day.”

Space is another promising area of cooperation, he told journalists, adding that during the talks they discussed the possibility of providing assistance to Bangladesh in launching telecommunications satellites.

The two countries are united in their efforts on tiger conservation, he said. “Let me remind you that Madam Prime Minister took an active part in the preparation and holding of the St Petersburg International Forum on Tiger Conservation in 2010.”

The two leaders have agreed to hold the Days of Culture of Russia and Bangladesh in 2014-2015.

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When we don't have proper health care, child and old age care program and other basic human services, then there is no good cause to sign a deal a $1 billion. Is this to make some quarters and the supplier country at the cost of taxpayers' money?

: Sengupta, Canada

There cannot be any doubt that we have to have a modern defence force, however, small numerically it may be. In armaments and technology, the forces must be upgraded and made capable to resist evil forces, both external and internal. From that point of view, we welcome the arms purchase from the USSR. However, some reservations remain. Firstly, the issue was not discussed in the JS or in the relevant Standing Committee at all. Secondly, why should the nation remain unawares about such a deal? Moreover, the loan of $1 billion obtained from Russia was borrowed at an exorbitant rate of interest, something like 5% which is rather a commercial rate. The interest rate from a friendly country like Russia could have been at least at par with that of PRC or India which is sadly not the case. The country's debt servicing would thus be under considerable stress in the coming years which does not augur well for our economy. Though delayed, we expect our government to divulge the contents of the deals and MOU's signed with Russia.

: Reaz Hassan


  • Mijan
    Wednesday, January 16, 2013 01:07 AM GMT+06:00 (160 weeks ago)

    Any arms purchase deal should have been debated in the Parliament first and then the decision should have been taken to go ahead. There is point of criticising its merits and demerits after signing the treaty when it involves such huge foreign currency.

  • Concerned
    Wednesday, January 16, 2013 01:09 AM GMT+06:00 (160 weeks ago)

    While for others there was MoU signed. But on weapons it was the deal that was finalised! This deal is NOT needed for BD. It is SUICIDAL, while so many areas are to be funded and improved. Schools, hospitals, roads, dredging, culverts, transport, so many other areas are supposed to be priorities. We so easily buckled in.

  • Sheikh Monirul Islam, Opee
    Wednesday, January 16, 2013 01:09 AM GMT+06:00 (160 weeks ago)

    In Japan, the interest rate is Zero, in US it is around 0.5% and Europe is less than 2%. Some of the Scandinavian countries are offering in negative percentage of interest to promote business and trade; And here we are borrowing at 5% when WB & IMF lend at around 2% or below to buy military hardware from a country which itself is the manufacturer. We must know in details how this was done and agreed upon. It is similar to arrangement for Biman brand new aircraft financing during military-backed CG which was fixed at very high rate including some interesting clauses to channel the interest payment through some private banking arrangement using extraordinary facilities through the help of JP Morgan. As a result, we are able to observe why Biman Chairman is maintained from the very beginning despite all his inability to run a commercial organisation like Biman. Why this is being done, because he is the trusted person of PM and he has track record of dealing the MIG-29 fiasco during the previous tenure. There are some really shady deals are taking place right at this stage and the government need to be challenged.

  • Semul Mollik
    Wednesday, January 16, 2013 01:19 AM GMT+06:00 (160 weeks ago)

    Deal of military equipment for Bangladesh is good. As we are living under poverty level so, this is not high time to $1 billion big amount of deal.

  • Nick Amir
    Wednesday, January 16, 2013 01:37 AM GMT+06:00 (160 weeks ago)

    This deal is all about geo-politics. The Burmese are armed by the Chinese. Bangladesh needs to create a balance against the Burmese threat. Therefore, an arms deal with the Russians is welcome. However, the interest rate is going to be too much creating a burden on Bangladesh's balance of payments.

  • RCH
    Wednesday, January 16, 2013 01:39 AM GMT+06:00 (160 weeks ago)

    SK Hasina last time bought 8 MIG 29 --now only 4 are flyable! Those fighter frames were laying the harsh Russian weather before refurbished for sale to Bangladesh as per Jane's defence. Why is she doing it again? Just because West is giving her trouble with democracy?

  • ashfaq choudhury
    Wednesday, January 16, 2013 02:07 AM GMT+06:00 (160 weeks ago)

    Some of the items in this defence purchase will definitely help BD to meet up the requirements for UN deployment. BD armed forces definitely need these vital gears to perform global assignments.

  • Towhid Tuhin
    Wednesday, January 16, 2013 02:18 AM GMT+06:00 (160 weeks ago)

    The project of nuclear power plant will be a constructive one. We may seek financial support to improve our several sectors like agriculture, education and so on. But I do not realise the importance of buying such costly weapon where there are other demands to be fulfilled. It is question of fact that where these weapons will be used. Is there any political reason to buy them?

  • EB
    Wednesday, January 16, 2013 02:44 AM GMT+06:00 (160 weeks ago)

    Who is advising this AL government? Buying arms is waste of people money. We should invest in infrastructure. We need that for our growth. Look East – Economic power is way to move.

  • Asad Zaman
    Wednesday, January 16, 2013 03:43 AM GMT+06:00 (160 weeks ago)

    $1B defence deal may sound big, but it is one aspect of the whole mission of the PM’s visit. Renewing friendship -- with a trusted nation (Russia) that came to the people’s (Bangladeshis) aid during the war of independence, and vetoed three times in favour of the struggling people of Bangladesh at the United Nations— IS one of the primary ingredients of that whole mission. It is about signing 8 other deals. So, 1B defence deal for a rising country in the 21st century is not that much. The PM is not alone there to decide $1b contract, it is usually the high-ranking defence people who advice PM that what the country needs for its defence. Furthermore, if there are no oppositions in the parliament, the sole responsibility of the country’s defence matter then falls on the shoulder of the government. So, let the government to do its duty for the best of the country.

  • Steveho
    Wednesday, January 16, 2013 04:01 AM GMT+06:00 (160 weeks ago)

    Ludicrous! A luxury Bangladesh can ill afford lost all credibility with the ADB, WB, and JICA. Assisting Bangladesh in becoming middle income country to find the government's aims and aspirations lay elsewhere.

  • ask
    Wednesday, January 16, 2013 04:08 AM GMT+06:00 (160 weeks ago)

    What a travesty and short sightedness when there are so many dire needs. The armed forces are already pampered and given resources the country can ill afford. But then politics is about making money in Bangladesh and politicians do not give a hoot for the people or country.

  • Selma
    Wednesday, January 16, 2013 04:47 AM GMT+06:00 (160 weeks ago)

    Is it prudent to spend all these money when our hospitals, schools and roads are all old and dilapidated! I wonder how much commission the Russians offered to seal the deal.

  • Ferdous Jalil
    Wednesday, January 16, 2013 04:55 AM GMT+06:00 (160 weeks ago)

    $1 billion for weapons is nothing, but $1 billion for 5 grand hospitals or 50 schools or an elevated expressway or the Padma Bridge is a lot. This is indeed really sad...we do not need weapons....who are we going to fight....

  • Roni Rahman
    Wednesday, January 16, 2013 05:55 AM GMT+06:00 (160 weeks ago)

    We can not get money for basic fundamentals like bridges and roads, and yet trying buying guns on billions dollars high interest borrowed money? Who are the beneficiaries? A select group and individuals at the expose of the national debts?

  • Ahsan
    Wednesday, January 16, 2013 06:04 AM GMT+06:00 (160 weeks ago)

    What will we do with the weapons? Fight India? Let's be practical. The $1b arms deal is a total waste of money. A major portion of it will be spent for the bribes; commissions etc. and the remainder will be spent on buying unnecessary weapons which will become unusable soon after. The poor people of this country will be left holding the bag.

  • Misbah Uddin Sumon
    Wednesday, January 16, 2013 06:57 AM GMT+06:00 (160 weeks ago)

    When the prices of daily necessary goods and services are uncontrolled people are calling hartal to give subsidy in oil, when there is uncertainty of collecting fund for making Padma Bridge, when the prices of electricity increasing, where unemployment rate is increasing day by day, why our government is buying weapons? Government have to fulfil the basic needs of food, clothing, housing, education and treatment if government satisfy these fundamental needs then can think about safety and security as well as buying weapons.

  • Tarik Zaman
    Wednesday, January 16, 2013 07:46 AM GMT+06:00 (160 weeks ago)

    Running a state is not just running a club. State needs to consider many aspects of the complex geo-politics. When we buy military items from China more than a billion dollar- we keep our eyes closed. Do not we buy from USA? Since it is from Russia- we are a bit over concerned and publicise it as the unnecessary procurement. Whether we need a regular and a big defence force, certainly debatable. As long you have an elephant, you need to feed it to keep fit, and equip it.

  • The World Without War
    Wednesday, January 16, 2013 09:49 AM GMT+06:00 (160 weeks ago)

    Two intelligent leaders, sitting on two ends of the scale. Now remembering the story of a fox and a crow.

  • Thasin
    Wednesday, January 16, 2013 10:23 AM GMT+06:00 (160 weeks ago)

    Ya it is always a bit tricky when it comes to arms and ammunition but to cope with the developed defence system of other countries we also should act. It will give our defence force exposure of modern tech. Good deal to me.

  • Nasirullah Mridha,USA
    Wednesday, January 16, 2013 10:38 AM GMT+06:00 (160 weeks ago)

    Teachers are struggling to get their institutions under MPO amid enduring police brutality on streets. Our shabby infrastructures are keeping the investors away from set up any industries. Rental power is another stinging abscess for the industrialists. Government can not provide enough money on this sector due to money constraints. Spending $1billion on defence in present circumstances should have been less priority. A wee bit government could have accentuated on Parma bridge fund from Russia.

  • Hasan-SZ
    Wednesday, January 16, 2013 11:10 AM GMT+06:00 (160 weeks ago)

    $ 1 Billion for obsolete Russian technology, who is Bangladesh going to use it against, India?

  • Shibesh Kirttania
    Wednesday, January 16, 2013 11:19 AM GMT+06:00 (160 weeks ago)

    A country should not go for any ambitious defence deal until it gains sufficient economic/financial strength without caring for assistance from other states.

  • rezaul
    Wednesday, January 16, 2013 11:38 AM GMT+06:00 (160 weeks ago)

    I support it because we need safety.

  • Md Shahjahan
    Wednesday, January 16, 2013 12:56 PM GMT+06:00 (160 weeks ago)

    We want all signed deals & MoU's must be discussed in the national assembly (Sangsad).

  • Patriot
    Wednesday, January 16, 2013 01:27 PM GMT+06:00 (160 weeks ago)

    I think it is a good deal we have to secure our country first. India might have given us a lower interest rate but the terms and conditions are such that we would be better of paying 20 percent interest. We should really strengthen our military so that our friendly neighbours shows respect and only then we can get a fair deal on bilateral issues.

  • Iftekhar Hassan
    Wednesday, January 16, 2013 12:13 AM GMT+06:00 (160 weeks ago)

    Everything is good about this deal. Except the $1 billion weapon deal. Bangladesh does not need advance weapons. Any weapon deal lead to violence, war and destruction.

    Bangladesh should develop as a peaceful democratic country with solid free trade concept.

    I can see need for strong police force but not an standing army to waste money that need to go to infrastructure, education, agriculture and new land claiming and development like that of Holland.

  • OpeeMonir
    Wednesday, January 16, 2013 12:15 AM GMT+06:00 (160 weeks ago)

    Last time we bought one sqadron (8 off) of Mig-29 and today virtually all of them are grounded due to no replacable engine and spare parts. An investigation was due, but the case was squashed by this government. Hope in the near future the case will be reopened. This time we are not even aware of the shopping list and what kind of combat aircraft are we going to choose? The nation need to know as we all have our RTI and in this 21st. century such purchases are of no secrecy in that sence; if at all it is due to correct practices are involved. We need to know what's in those deal including the Nuclear powerplant?

  • Anonymous
    Wednesday, January 16, 2013 12:16 AM GMT+06:00 (160 weeks ago)

    1billion dollars defence deal will gain what was lost in the WB Padma bridge loan. The government does not have to worry about the gains through deals.

    Previously, a deal would bring taka 3 crores, but this time it should bring more that 6 crores of taka.

  • An Observer
    Wednesday, January 16, 2013 12:17 AM GMT+06:00 (160 weeks ago)

    What for Bangladesh needs 1 billion dollar arms at 5 percent interest rate? Whom Bangladesh is going fight? India or whom? This is the utmost silly for a poor country to spend such a huge amount for nothing.

  • Jumana Sarwar
    Wednesday, January 16, 2013 12:22 AM GMT+06:00 (160 weeks ago)

    There is nothing wrong modernizing the defence forces; however failure to set priority is not prudent. The nation has many pending issues and certainly her Gov. failed to address and resolved those that matters most for the nation.

  • Abdur Razzak Mreedha
    Wednesday, January 16, 2013 12:38 AM GMT+06:00 (160 weeks ago)

    Bilateral relations between Bangladesh and Russia has reached a new height and perspective through this visit.Seikh Hasina has a statemanship in leading the country.Long expected infrastructure development of the country has got a new pathway to go a far. Soft loan from Russia $ 1.5 b and its technical support to proposed Ruppoor nuclear power plant and defence deal will help Bangladesh to achieve success both on power generation and country's defence capabilities.





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