BLUE ECONOMY AND FUTURE OF BANGLADESH

Introduction

1. The “blue economy” concept seeks to promote economic growth,

social inclusion, and preservation or improvement of livelihoods while at the
same time ensuring environmental sustainability. At its core it refers to the
decoupling of socioeconomic development through oceans-related sectors
and activities from environmental and ecosystems degradation (UNCTAD
2014; UN DESA 2014a). Challenges in the sustainable use of marine
resources— such as the impacts of climate change in the form of rising sea
levels, increased frequency and severity of extreme weather events, and
rising temperatures—are going to have direct and indirect impacts on
oceans-related sectors, such as fisheries, aquaculture, and tourism, and on
maritime transport infrastructure, such as ports, with broader implications
for international trade and for the development prospects of the most
vulnerable nations, in particular coastal least developed countries (LDCs)
and small island developing states (SIDS). While the blue economy, both
as a concept and in practice, is relevant to all countries, this paper focuses
on Bangladesh which has just came out from the barrier of LDCs to DCs.
Even though the topics which are lightened here are still remarkably
applicable for BD.

Aim

4. The aim of this paper is to apprise Blue Economy in perspective of

Bangladesh.

Relationship of BD to Oceans, Seas, and Marine Resources

5. The blue economy aims to move beyond business as usual and to

consider economic development and ocean health as compatible
propositions. It is generally understood to be a long-term strategy aimed at
supporting sustainable and equitable economic growth through oceans-
related sectors and activities. The blue economy is relevant to all countries
and can be applied on various scales, from local to global. In order to
become actionable, the blue economy concept must be supported by a
trusted and diversified knowledge base, and complemented with
management and development resources that help inspire and support
innovation.

6. Bangladesh faces particular challenges to their sustainable

development, including small populations, limited resources, vulnerability to
natural disasters and external shocks, and strong dependence on
international trade. Our growth and development is often hampered by high
transportation and communication costs, disproportionately expensive
public administration and infrastructure due to their small size, and little or
no opportunity to create economies of scale (FAO 2014b). Our low level of
socioeconomic development is characterized by weak human and
institutional capacities, low and unequally distributed income, and a scarcity
of domestic financial resources. Bangladesh often suffer from governance
difficulties, political instability, and, in some cases, internal and external
conflicts. Again her largely agrarian economyis affected by a vicious cycle
of low productivity and low investment. We rely on the export of a few
primary commodities as the major source of export and fiscal earnings,
which makes them highly vulnerable to external terms-of-trade shocks.
Only a handful has been able to diversify into the manufacturing sector,
although

7. BD provide a basis to pursue a low-carbon and resource-efficient

path of economic growth and development designed to enhance livelihoods
for the poor, create employment opportunities, and reduce poverty (UN
DESA 2008). For us, the move toward a blue economy provides an
opportunity to address their particular challenges in a sustainable way.
Because BD economy rely significantly on natural resources and
biodiversity in marine and coastal areas, there is a large potential for
diverse ocean economies—from established industries such as fisheries to
newer areas such as renewable ocean energy.

8. BD, however, often lack the technical, institutional, technological, and

financial capacities to benefit to the fullest from their marine resources. This
lack of capacities and resources will need to be addressed in order to allow
the blue economy to achieve economic diversification, job creation, poverty
reduction, and economic development in BD. Growth in the blue economy
will require an appropriately skilled workforce and the promotion of science,
technology, innovation, and multidisciplinary research. Realizing the full
potential of the blue economy also requires the effective inclusion of all
societal groups, especially women, young people, local communities,
indigenous peoples, and marginalized or underrepresented groups
(UNECA 2016).

The Transition to a Blue Economy

9. Sustainable development implies that economic development is both

inclusive and environmentally sound, and to be undertaken in a manner
that does not deplete the natural resources that societies depend on in the
long term. The need to balance the economic, social, and environmental
dimensions of sustainable development in relation to oceans is a key
component of the blue economy. It is also a difficult balance to reach in
practice, given that ocean resources are limited and the health of the
oceans has drastically declined due to human activities—ranging from
damage caused by carbon dioxide emissions to nutrient, chemical, and
plastics pollution, unsustainable fishing, habitat degradation and
destruction, and the spread of invasive species.

10. While stimulating growth in oceans-related sectors is comparatively

straightforward, it is not always clear what a sustainable blue economy
should look like and the conditions under which it is most likely to develop
(Economist Intelligence Unit 2015). For each country, the formula is likely
to be different, depending on:

a. Unique national circumstance

b. Maritime zones (waters under its sovereignty and those in

which it has sovereign rights for theexploration and exploitation,
conservation, and management of living and non-living marine
resources)
 c. Existing economic activities and the degree to which they can
be expanded without undue harm to the environment

d. The potential for new and innovative activities

e. Issues related to capacities and unique environmental, social,

and cultural conditions.

Blue Econoimy of Bangladesh- Scarcity to Abundance

11. Strategies of various countries and shared experiences of experts

were discussed at a seminar organised by the Bureau of Investment (BoI)
titled, "Blue Economy of Bangladesh" and a subsequent international
seminar organized by the Ministry of Foreign Affairs. Now, it is for the
country to decide on its own strategy based on our geo-strategic
advantages. Our strategic thinking should be aligned with the reality for
which policy continuity is one of the priorities.

According to some experts, about 475 species of fishes available in the

Bay. Annually 6.6 million tonnes of fish is caught, of which a very small
portion has been exploited by our fishermen.

12. It is also worth mentioning that, according to FAO estimates (2012),

protein demand of about 1.0 billion people of the world has been met by
sea. Also, about 90 per cent of people from developing countries are
engaged in fishing and the sea is providing employment to about 14 million
people while contributing about $400bn to the world economy.

13. The contribution of fish and fisheries sector to our GDP (gross
domestic product) is about 4.37 per cent (2012-13) which can be increased
significantly if we can add sea resources. But for this, special training is
required since fishing techniques need to be upgraded to exploit sea
resources. Even though about 1.71 million people are engaged in this
sector, human resources, infrastructure and institutions are still lacking
because fishing industrial trawlers and skilled manpower are required to
take care of long line fishing. The National Fisheries Policy (1998) covers
policy for procurement, preservation and management of fisheries
resources in open water bodies; fish culture and management in closed
freshwater bodies; culture of shrimps in coastal regions; and exploitation,
conservation and management of marine fisheries resources. The policy
should be revisited and improved in order to better exploit the sea
resources.

14. Besides fish resources, there are mineral resources in the seabed.
Salt is one of the important resources that meet our daily needs. However,
Bangladesh's salt production has remained stagnant at 350 TH MT since
2003, as per United States Geological Survey (USGS) Minerals Resources
Program (2009). Salt industries have been set up in the coastal areas and
there area about 300 refining units. Production of industrial salt can be
done using advanced technologies and eventually it can become an export
product. Other mineral resources beneficial to Bangladesh, as mentioned
at the BoI seminar, are gas, copper, magnesium, nickel and precious
metals, including cobalt. Like many developed countries, Bangladesh can
also utilise the sea for producing renewable electricity. In addition, some
industrial sectors such as ship-building and ship-breaking industries
andpharmaceuticals can also benefit from the sea resources.

15. With regards to institutional capabilities of the Blue Economy, there

are currently three national marine academies and 22 other public-private
academies. These marine academies can train 600 skilled sailors and
marine officers a year. Public and private universities should open separate
units or departments to train and develop skilled manpower in the sector.

16. Given the increasing number of in-bound and outbound tourists in the
Cox's Bazar and St. Martin's beaches, sea water recreational facilities can
be increased to attract more tourists.

17. Coastal shipping should be developed. Backward and forward

linkages like shipping agencies, agents, stevedoring, ship shendler, freight
forwarder, banking and insurance business can also be expanded. Export
diversification is possible if we can fully exploit our maritime resources.
Pharmaceutical industry can also benefit from utilizing marine minerals.

Conclusion
The Bay of Bengal and the coastal regions provide the backbone of the
economy in Bangladesh. As highlighted in this paper (see Table 1), there
are several sectors of the blue economy that offer potential objectives for
development to achieve food security and economic development. The
blue economy related economic activities could generate jobs and bring
about significant tangible benefits to change the economics status and
livelihoods of millions of people living in the coastal areas. However, this
can only be achieved with a government strategy in line with UNEP blue
economy objectives, also with support from the international arena to
protect the national interests and objectives of blue economy development
in Bangladesh. Integrated and inter-sectoral/inter-ministerial coordination
including academia-industry, publicprivate, resource-responsibility, and
time-space are essential to bring forward the relevant issues related to blue
economy development in Bangladesh. Marine Spatial Planning (MSP) can
designate ocean spaces for specific uses such as marine cage farming,
fishing zones for artisanal and industrial fishers, navigation routes for
international and domestic shipping, marine protected areas (MPAs),
marine fishing grounds, breeding groundsof valuable and important
species, and migration routes of marine species to generate strong
foundation for economic earnings and social benefits. Lessons can be
learnt from developed nations such as the EU in pursuit of MSP to ensure
that developments in the blue economy lead to sustainable outcomes in
line with the country’s development objectives.

Recommendation

8. Key Messages for Future Action The different pathways toward the
blue economy depend on national and local priorities and goals.
Nevertheless, there are common steps that will be required by all countries
aiming to adopt this approach to managing their oceans. These include:

a. BD must accurately value the contribution of natural oceanic

capital to welfare, in order to make the right policy decisions,
including with regards to trade-offs amongst different sectors of the
blue economy.
b. Investment in, and use of the best available science, data, and
technology is critical to underpinning governance reforms and
shaping management decisions to enact long-term change.

c. Each country should weigh the relative importance of each

sector of the blue economy and decide, based on its own priorities
and circumstances, which ones to prioritize. This prioritization can be
carried out through appropriate investments and should be based on
accurate valuation of its national capital, natural, human and
productive.

d. Anticipating and adapting to the impacts of climate change is an

essential component of a blue economy approach. National
investments to that end must be complemented by regional and
global cooperation around shared priorities and objectives.

e. The effective implementation of the United Nations Convention

on the Law of the Sea is a necessary aspect of promoting the blue
economy concept worldwide. That convention sets out the legal
framework within which all activities in the oceans and seas must be
carried out, including the conservation and sustainable use of the
oceans and their resources. The effective implementation of the
Convention, its Implementing Agreements and other relevant
instruments is essential to build robust legal and institutional
frameworks, including for investment and businessinnovation. These
frameworks will help achieve SDG and NDC commitments, especially
economic diversification, job creation, food security, poverty
reduction, and economic development.

f. Realizing the full potential of the blue economy also requires

the effective inclusion and active participation of all societal groups,
especially women, young people, local communities, indigenous
peoples, and marginalized or underrepresented groups. In this
context, traditional knowledge and practices can also provide
culturally appropriate approaches for supporting improved
governance.
 g. Developing coastal and marine spatial plans (CMSP) is an
important step to guide decisionmaking for the blue economy, and for
resolving conflicts over ocean space. CMSP brings a spatial
dimension to the regulation of marine activities by helping to establish
geographical patterns of sea uses within a given area.

h. The private sector can and must play a key role in the blue
economy. Business is the engine for trade, economic growth and
jobs, which are critical to poverty reduction.

j. In view of the challenges facing by BD, partnerships can be

looked at as a way to enhance capacity building. Such partnerships
already exist in more established sectors, such as fisheries, maritime
transport, and tourism, but they are less evident in newer and
emerging sectors. There is thus an opportunity to develop additional
partnerships to support national, regional, and international efforts in
emerging industries, such as deep-sea mining, marine biotechnology,
and renewable ocean energy. The goal of such partnerships is to
agree on common goals, build government and workforce capacity in
BD, and to leverage actions beyond the scope of individual national
governments and companies.

k. Ensuring ocean health will require new investment, and targeted

financial instruments—including blue bonds, insurance and debt-for-
adaptation swaps—can help leverage this investment in order to ensure
that it maximizes a triple bottom line in terms of financial, social, and
environmental returns.
FUTURE SHIP BUILDING INDUSTRY IN BANGLADESH WITH SPECIAL
EMPHASIS TO THE CAPABILITIES OF BANGLADESH NAVY

INTRODUCTION

1. The rich history of shipbuilding in Bangladesh dates back to a long

ago. Due to congenial geographical location of this part of sub-continent,
people living here used to craft wooden boat for commuting and
transporting goods. Historical records say that Chittagong port was the best
centre of building ocean-going vessels in the middle of the 15th century.
Even in the 17th century, the entire fleet of ships of the Sultan of Turkey
was built at Chittagong. Also in 1805, the British Navy built ships at
Chittagong for the famous battle of Trafalgar. 1 However, with the passage
of time; the glory of shipbuilding in this region began to fade.

2. Shipbuilding revived again when a number of local entrepreneurs of

Bangladesh brought name and fame for the country by developing potential
in shipbuilding by handing over some ocean-going vessels to overseas
buyers from Denmark, Finland and Mozambique. Bangladeshi shipbuilders
have also handed over few ice-class vessels to a German company and
more vessels are going to be delivered by the next few years. Moreover the
shipyards maintained by Bangladesh Navy also producing ships for native
use and saving huge amount of foreign currency which includes some
warships and latest water jet propulsion Patrol boats. Thus shipbuilding in
Bangladesh is marching forward in a way to securing a firm position in the
world market and at the same time, the country is returning slowly to its
past tradition of building ships for foreign countries. Bangladesh is
presently contributing to the shipbuilding industries globally through its
exported workforce. These facts do not speak only of a heritage but of an
inbuilt ability of shipbuilding of people of this region which had been for
ages dependent on waters. Only over a period of 42 years after
independence, Bangladesh has developed a large fleet of about 20,000
vessels comprised of inland & coastal commercial vessels, and various
types of working and fishing craft.2

3. This paper will basically attempt to draw the future of shipbuilding

industry in Bangladesh and some areas where requirement of development
has been felt to have direct impact on the overall shipbuilding capabilities of
Bangladesh Navy. The present capacities will be discussed to get those
compared with the suggested plan and to relate the foreseeable challenges
in more clear terms. In the process of capacity development, all the
relevant points will be discussed with due attention. These particular skills
are essential not only to meet the future shipbuilding challenges but also as
standards of preparedness for our Navy to contribute in national economy
by enhancing shipbuilding capability.

AIM

4. The aim of this paper is to draw a picture of future shipbuilding

industry in Bangladesh on the basis of present structure and existing
potential with special emphasis to the capabilities of shipbuilding of
Bangladesh Navy to meet the future challenges.

PRESENT STRUCTURE AND CAPABILITIES OF BANGLADESHI

SHIPBUILDING

5. There are more than one hundred shipyards and workshops in

Bangladesh, most of them are privately owned shipyards. Out of these
shipyards, approximately 70 per cent are located in and around Dhaka and
Narayanganj along the side of the river bank of Buriganga, Shitalakha and
Meghna. About 20 per cent shipyards of Chittagong division are located
along the side of the river Karnapuli and 06 percent are located along the
bank of the river Poshur in Khulna division while the remaining 04 percent
are located in Barisal division. Bangladesh Navy got three shipbuilding and
repair platform in Narayangonj, Khulna and Chittagong respectively. 3
6. Field data shows that most of these yards follow indigenous methods
of construction and are not equipped with man, machineries and equipment
required to build standard ships. These yards are mainly engaged in
building and repairing inland and coastal vessels, up to 3,500 DWT.
Recently, few of these yards, have attained the capability to manufacture
ships of 10,000 DWT and they are expanding their facilities to upgrade
them up to 50,000 DWT.  Moreover the Bangladesh Navy directed yards
recently proved their capabilities in building medium size war ships and
modern patrol boats. About seven per cent shipyards have the capability to
entertain quality shipbuilding right now. Another nineteen per cent
shipyards have undertaken renovation and expansion programs for
construction of ships (small and medium category) of international
standard. Some new shipyards are also coming up to build export-oriented
ships and Navy controlled yards are coming up with latest technology to
build larger war ships.

7. Existing Shipbuilding Capacity of Bangladesh Navy.

a. Bangladesh Navy Dockyard (BN Dockyard) .

(1) Bangladesh Navy inherited virtually no maintenance

infrastructure or a dockyard and had to start afresh to build up
one. Over the last 30 years of its history, thus the BN
DOCKYARD has grown from a base workshop facilities to one
of the modest ship repair yards in our country. Spreading over
47 acres of land, it has wide range of engineering facilities to
meet maintenance need of warships and crafts of BN.

(2) It is generally known that the prime role of BN Dockyard is

to keep BN fleet operational. However, the functions of the yard
today are not only restricted to schedule refit-docking by
rendering repair and maintenance support, but also includes
 mid-life modernization of ships. The overall functions get
included in the followings:

(a)    Designing and executing various naval projects,

modifications and up gradation of works, installations of
new equipment etc.

(b)    Major equipment and machinery repair

including overhauling and testing.

(c)    Recruiting dockyard civilian personnel and train

them.

(d)    Development and repair of naval berthing

facilities.

(e)    Arranging water and electricity supply and

accommodation facility to the ships and her crews.

(f)    Providing assistance to sister services,

maritime agencies and other civil organizations.

(3) The BN DOCKYARD has strength of over 1400

employees, bulk of who are the industrial civilian workers. The tasks of
quality repairs have been so far made possible in its 22 workshops.
These shops deal with the various complex technology and intensive
engineering systems used onboard ships. Despite the limited
resources, expertise and infrastructural facilities, BN DOCKYARD
undertakes about 100 jobs on any single day. In average, it
takes nearly 30 ships per year for docking and refit. Besides supporting a
growing naval fleet of more than 75 ships, this dockyard also carries out
yearly about 30 project works. All together, about 1.3-million man-
hour labor worth of about 6.5 million US$ is generated annually to
4
accomplish the tasks.

b. Khulna Shipyard Ltd. (KSY).

(1) KSY with over five decades of reputation has been
leading the Bangladesh Shipbuilding industry and had built a
wide spectrum of ships conforming to rules and regulations of
leading international classification societies. The construction
works of KSY started in 1954 under supervision of the East
Pakistan Industrial Development Corporation (EPIDC). After
took over by Bangladesh Navy the first-ever warship, BNS
PADMA built in Bangladesh by Khulna Shipyard Limited (KSY)
has been commissioned in Bangladesh Navy on 24 January
2013.

(2) Shipbuilding department of KSY is capable of new

building and renovating ships of various types e.g. patrol craft,
cargo and passenger vessels, Launches, oil tankers, workboat,
tugs, dredgers, explosive barges, self-propelled barges,
pontoons, L.C.T. etc. having maximum light and dead weight of
700 and 2000 tons respectively. Starting from 1957, KSY has
built about 700 new ships and crafts and renovated 10 ships.
Khulna Shipyard has the capability to install ship's system and
top of the range marine equipment for any onboard function.
The overall functions get included in the followings:

(a) Repair and renovation are the most normal activities

at this shipyard.

(b) Extensive facilities for under water and above water

repair of ships.

(c) KSY encompasses design and construction of roof

trusses, chimney, staging girders, mooring buoys, light
tower, trolleys, trailers, steel tanks, vertical and horizontal
storage tanks of all types in welded construction for water,
oil or fuel of any capacity required, tanks mounted on
Lorries and wagons etc.

(d) Centrifugal pumps, winches, boat davits, pipes of

welded construction, machine parts of jute mills, textile
mills etc.
 (e) Repair of refrigerators, coolers, electric motors,
engines etc. Different type of cranes such as berth cranes,
dockside crane, gantry crane, workshop overhead cranes
etc. Caisson gate, sluice gate, electric poles, tubular piles etc.

(3) KSY has so far repaired over 1800 vessels; out of these,
about 50% were man of war. Bangladesh Navy, Bangladesh
Coast Guard, Bangladesh Army, Bangladesh Rifles,
Bangladesh Railway, Bangladesh Inland Water Transport
Corporation, Sugar Mills, Power Development board are KSY's
regular customers. Khulna Shipyard is one of the well laid out
shipyard of this region with 549 miters River front having total
area of 68.97 acres. 5

c. Dockyard and Engineering Works Ltd. (DEW).

(1) DEW Ltd. was established in 1926. Due to various

reasons during late nineties, the industry started incurring severe losses
and consequently was laid off at the end of 2002. Thereafter, on 07
December, 2006 DEW Ltd was handed over to Bangladesh Navy (BN)
under the Ministry of Defense (MOD) with existing and obsolete
machineries and workshops on 21.78 acres of land. During the lay off
period the yard has almost losses her capability. However, presently DEW
Ltd has begun its production by all out effort under BN
management. Now DEW Ltd regains international standard and its
new building capability. On 21st April 2013 DEW has handed over their
first water jet propelled aluminium patrol boat to Bangladesh Coast
6
Guard.

(2) DEW is capable of new building of small & medium

merchant vessel as well as small & medium warships for
government and any private organizations. The capabilities may
be mentioned as:

(a) DEW Ltd can build ocean going, coastal and river
going Coaster, Tanker, Containership, Ro-Ro Ferry, Launch,
Survey vessel, Cargo vessel, Hospital vessel, Pleasure
Boat, Tug, PC, LCT, LCVP, etc. This shipyard is capable of
making steel, aluminium, fiber, Glass Reinforced Plastic and
wooden boats. DEW Ltd builds thousand of vessels since its
journey.

(b) DEW Ltd is capable of repair all kind of small &

medium merchant, government and defense vessel.
This shipyard repaired more than seven thousand
of vessels since her inception.

(c) DEW Ltd can build and repair of shaft, pulley,

trolley, pontoon, boiler, steel box, factory & machinery
parts, dumb & self propel barge, etc.

(3) DEW Ltd. is to develop manufacturing and building

ships of at least six thousand DWT by the year 2020 and upgrade
its present infrastructure and human resources up to the
international shipbuilding standard. DEW Ltd is to develop
facilities and infrastructure to satisfy the needs and demands of all
national and international maritime sectors by providing
highest quality services to build and repair all types of marine
and class vessel/craft by the year 2020.

d. Shipbuilding Industry of Bangladesh at a Glance.

(1) Identification of existing shipyards. There are

hundreds shipyards and workshops in Bangladesh of which 124
have been reported to be registered with the Department of
Shipping (shipyard statistics, 2009). (Annex A)

(2) Categorization of shipbuilding yards. These yards are

mainly engaged in building and repairing of inland and coastal
vessels, up to 3,500 DWT. Only a few of these firms have attained
the capability to manufacture ships of 10,000 DWT. If the
shipyards are considered on the basis of modern shipbuilding requirement,
the shipyards of Bangladesh (Total 67) can be categorized into 4
classes (Annex C):
 (a) Class A Shipyard which are ready for
construction of ships (Small & Medium Category) of
international standard.

(b) Class B Shipyards with some renovation &

expansion will be ready for construction of ships (Small &
Medium Category) of international standard.

(c) Class C Proposed shipyards which are coming in

production of ships (Small & Medium Category) of
international standard very soon.

(d) Class D Remaining shipyards which can make

inland vessels under local regulatory standard.

(3) Type and Sizes of Ships being built in Bangladesh .

A number of various types of vessels are built in various
Bangladeshi shipyards around the country. A considerable
number of classed vessels have been built in Bangladesh so
far. Among them 11 were classed by ABS, 5 by DNV, 3 by LRS and one
vessel each by NK and BV.

STRENGTHS AND WEAKNESSES OF SHIPBUILDING INDUSTRY IN

BANGLADESH

8. The strengths of the Bangladeshi shipbuilding industry are cheap and

available workforce, a glorious shipbuilding history, presence of forward
and backward linkage industries, including technical institutes for
supporting this industry, the government’s commitment to develop the
sector and presence of convenient geographical advantages, duty free
market, easy importation facility etc.
9. In the past, shipbuilding industry of Bangladesh failed to keep pace
with consistency due to lack of proper government and private initiatives as
well as anti-industry mindset of the nation. This has ultimately caused non-
penetration in international business as a shipbuilding nation. Thus existing
problems of this sector may be categorized in the following broad headings:

a. Financial problem. Shipbuilding is capital and labor

intensive industry. The local commercial banks are not individually capable
of making required investment in this industry. There is dearth of capital
and investment especially when the scale of investment is to the tune of
100 to 1000 crore or more because of the risk is considered too high for
both the entrepreneurs and bankers. As a results, productivity expansion
and export promotion are being impeded. High rate of interest is applied
on industrial and working capital loan. Existing rate of interest, ranging
from 12% to 16% for industrial and working capital loans, is not
suitable for the development of this sector. Whereas 7% rate of interest
on export credit is prevailing for other export sectors like readymade
garment sector. Bank guarantee for export of ships from Bangladesh is
about 16% (local 4% and foreign 4% for two year period).7

b. Human Resource Development problem. At present

Bangladesh is not working in the field of ship design, though skilled
manpower is available. As a result, lack of adequate and expert design
firms and expertise in design are an impediment for high value added
product. Moreover, most of the local shipyards are lacking of modern ship
building tools, machineries and technology. At the same time lack of
expert machine operators is found in the most local shipyards. Local
shipyards owner consider every human resource development program
as money drain, not gain. That’s why they are maintaining poor training
facilities of the technical personnel. In a ship, there are about 4000
different components, which are to be installed within a very limited space
of the ship. There is a lack of skilled manpower in Bangladesh in such
specified field.
 c. Infrastructure problem. Access to the rivers and sea, that
is, foreshore for shipbuilding entrepreneur is restricted by bureaucracy
problem like unfriendly attitude of the administration toward local
shipbuilding. Impositions of foreshore charges as well as the charges on
erected installations are high and in some cases duplicate charges are
imposed. The restricted draught (Maximum 4.0 to 4.5 Meters) is the
limitation to the size of a ship that can be built in these shipyards.
Bridges and overhead cables may induce n ew restriction to the ship size
that may be built in a shipyards located in the hinterland. Other than
government owned dry-dock, none of the shipyards have the dry docking
facilities. Most of the shipyards are located in and around Dhaka, far
away from the sea.

d. Marketing problem. There is a lack of activities to promote

Bangladesh as a shipbuilding nation. Foreign ship’s owners and their
representatives have some reasonable complains about behavior
and attitude of local shipyards. The image problem of the nation
hinders the export of ships. In difficult contractual commercial
negotiation, it is a must to have adequate support from our
mission abroad, our government as well as cooperation of foreign
embassies in Bangladesh.

e. Management problem. Most of the local shipyards do not

follow corporate management culture. Family members and friends
occupy the important managerial appointment such family and friend
management culture is one of the hindrances to the development of the
industry and also will not commensurate with international arena.
Poor communication between upward and downward grid in the
managerial chain exists. Middle management neither enjoys any
financial authority nor decision-making process (with little exception in
few shipyards). As a result, poor command and control as well as
 negligible dedication of the employees toward the organization
observed.

f. Technical problem. Lack of model testing and other facilities

in Bangladesh also matter. NDT and Design Lab facilities are also
poor in every institutions and shipyards around Bangladesh.

g. Quality control problem. Lack of quality control groups and

their work and capability are in question. Lack of sincerity of workers due
to poor job satisfaction and working environment limits the opportunity of
further development. Bangladesh is lacking in the safety culture.
Safety is a long-term investment.

h. Delay delivery problem. A timely delivery is a major factor

of shipbuilding because of the involvement of huge capital. But
punctuality is not habitual in our culture. In general Bangladeshi shipyards
are often not able to match the delivery time of a new ship building with
that of other countries. Most of the local shipyards do not follow the
modern job evaluation and execution technique (such as PERT, CPM
etc). As a result, liquidated damage due to delay delivery is foreseen.
Renowned export oriented foreign shipyards deliver a ship in about six
months, whereas local shipyards take2 to 3 years to build and deliver
similar ship.

POTENTIALS FOR SHIPBUILDING IN BANGLADESH

10. Workforce. Shipbuilding, an ancient assembling industry

producing tailored products, accordingly having the largest human input per
unit of produce, is always moving to countries with lower wages of required
skills. Bangladesh has comparatively a lower cost of human inputs and can
offer the best combination of cost, quality and productivity with its fast
growing young workforce.

Table-1: Comparison of Labor Cost in USD

Banglade Indi Chin Singapo S.Kor Japa Ital Fran Norw Finla
sh a a re ea n y ce ay nd

0.5 1.0 1.5 3.0 6.0 12.0 13. 13.0 14.0 15.0
0

11. Productivity. A comparison of productivity shows that workforce

while China may be well ahead of India in total shipbuilding; its productivity
is almost the same as India. Productivity of Bangladesh expected very
similar to that of India. (Annex D)

Table-2: Comparison of Productivity

Country Completion M Employees Productivity DWT

DWT
Person/year
Japan 23.2 80000 290
S.Korea 23.0 71800 320
China 8.8 158000 56
India 0.6 12000 50
Bangladesh No data found 40
12. Lower Effective cost. Table-3 speaks for the strength of Bangladesh
to grow as a shipbuilding nation in terms of effective cost of workforce. A
drawn comparison of the cost and productivity of a few shipbuilding
countries vis-à-vis Bangladesh shows India the nearest alone competitor is
2.5 times away and Korea, 4 times costlier in terms of workforce alone.

Table-3: Cost Effectiveness

Country Weighted labour Weighted Weighted average

rate productivity output cost
Bangladesh 0.5 1.0 0.5
India 1.5 1.2 1.25
China 1.5 1.4 1.07
S.Korea 6.0 3.0 2.0
Singapore 4.0 2.0 2.0
Germany 15.0 5.0 3.0

13. Quality. Quick learning ability of the workforce is a key element t

to help Bangladesh move into international shipbuilding faster. Time
required for an individual artisan of a category to move to the higher level,
such as, a semi-skilled welder to a skilled welder, has been found on an
average to be 3 months. The workforce Conversant with English and it is
possible communicate in English nearly in all levels. In general workers are
very diligent

14. Higher Level Skills. There are quite a many engineering

universities under Public and Private sector producing graduates of various
disciplines, such as, engineering, industrial production, metallurgy,
management, finance & marketing. Quite a few universities and institutions
are producing graduates in the field of management, finance and
marketing. Indeed Bangladesh has a prestigious position worldwide for its
young white color workforce.

15. Expatriates. Since 1974, more than 50% of BUET

produced graduate naval architects and marine engineers have been
working abroad and about 60% of them in shipyards. Ex-mariners can be
great contributors in the future shipbuilding industries of Bangladesh. In
Singapore, more than 30% engineers and workers are from Bangladesh in
shipbuilding and ship repair. In Dubai and in shipyards in the Persian Gulf,
Bangladeshi workers represent more than 20% of the total workforce.
Shipbuilding engineers and workers from Bangladesh are engaged in
countries like USA, Australia and Canada and numbers are increasing.
Many of them on return may join the shipbuilding sector and inject their
experience and add new exposure to accelerate faster healthy growth of
shipbuilding in the country.

16. Geophysical Conditions.

a. Basins. Excluding sand bars and shoals here and there,

rivers are very deep in Bangladesh. Water frontage may be
considered suitable for organized planned shipyards. Available water
depth maintained guaranteed up to Dhaka port is 3.66m. However
commercial vessels navigate with 4.25m loaded draft (Annex B).
Thus vessels having a light draft on a reasonably attained even keel
of 4 m may be built and taken to the sea from any place in between
the sea and the capital, Dhaka. Multipurpose cargo, oil tankers and
container vessels having light weight of say, 7000/8000 tons i.e. DWT
of 20000 – 25000 tons may be built for export. 8
 b. Long coast line and river falls. The long coast line and
mouths of rivers falling to the sea offer excellent places for
development of shipyards and shipbuilding zones. The topography of
rivers and river banks bestow special advantages for building small
and medium size ships. Shankoo basin and Meghna fall are good
examples.

c. Weather condition. Apart from the heavy long monsoon and

therefore high humidity and rains, Bangladesh has a very good
weather allowing 14 working hours a day for most of the year.
Temperature is very reasonable and cold protection is hardly needed.

17. Other Factors.

a. Training institutions. There are vocational training institutions

financed and managed by the government with an intake capacity of
some 35512 annually producing skilled manpower, a portion of which
may flow to shipbuilding industries.

b. Linkage industries. Forward and backward linkage industries

both of services and hardware are essential for shipbuilding. SME,
small and medium enterprises, is a slogan in Bangladesh. The
Government, development partners and financial institutions are
jointly and individually working to strengthen the sector. Bangladesh
is now exporting a few items meeting quality requirements, which
may be used in shipbuilding. Of them, furniture, pipes, iron chains,
wire and cables, light fittings, glass sheets, synthetic ropes are
mentionable. The total export earnings from these items were
US$ 32.04 million in 2008-2009.

c. Access to the shipping world. Bangladesh built ships enjoys

duty free market access. Bangladesh has earned confidence of
shipping world of the quality of her built ships. It is known to shipping
world through its sea farers, marine engineers and captains and to
the shipbuilding through its work force and engineers working in
 shipyards around the globe. It is also well known to the shipping
world through its ship breaking industry. Identifications of potentials of
a deep sea port reflect the significance of its important geophysical
maritime location.

d. Courageous entrepreneurs. Courageous entrepreneurs

have created a reasonably strong industrial base in just over three
decades. These entrepreneurs will be playing a commendable role in the
development of modern shipbuilding industries. The growth will take
place in the private sector, an advantage compared to many competing
countries.

WORLD SHIP BUILDING SCENARIO

18. South Korea, China and Japan have been leading the world
shipbuilding for the past few decades. The total world production share by
some shipbuilding nations in 2008 is shown here.

S KOREA 12.4
CHINA 8.4
EUROPE 1.4
JAPAN 0.9
OTHERS 1.4

Figure1. World Shipbuilding Production by Nations in year 2008 (in million

GT)
According to the amounts shown in the figure, South Korea was leading the
market having a lion share. But a change was visible in the following years.
Presently market leaders of world shipbuilding industry are not interested to
build small ships of less than 25,000 DWT and that market is open to the
other shipbuilding nations. The current average increasing rate of ships in
tonnage is approximately 21 million GT per year. Considering US$ 7,620
construction cost per GT, total global market size is US$ 1,600 billion. If
Bangladesh can grab 1% of the global order of small ships market only
(which is about US$ 400 billion), the amount will be worth US$ 4 billion. 9
Again traditional market leaders of world shipbuilding industry are over-
booked mainly for construction of large ships, so the ships’
buyers/entrepreneurs are in search of incisive new, suitable and reliable
markets in Vietnam, Bangladesh, India, Brazil, Indonesia, etc. On the other
hand, the market of small-ships and vessels of various types is remaining
unaffected by the recent global recession. Recession has caused a drop in
demand for large vessels. Global giant shipbuilders cannot capitalize on
this new market demand, as their projects will prove to be unfeasible
because of the high overhead costs they already bearded. Moreover,
orders for small ships have gone up because of the global financial crisis.
Again shipbuilding history has seen that, in the recession, South Korea
expanded its capacity instead of reducing business scales like Japan.

FUTURE OF BANGLADESHI SHIPBUILDING

19. In recent times, more connectivity among different nations has led to
increase in international shipping. As a result, shipbuilding demand is
increasing annually. Also, the replacement requirement of a large number
of small ships operating around the globe, enforcement of use of double
skin ships, a strong desire of fuel efficient and environmentally friendly
ships will keep the demand growing for the world market. The internal
demand in national and regional waterways in the areas of service and
support craft, supply vessels, port servicing craft, fishing fleets, smaller
ships for feeder services etc has been also consistent. As a result,
Bangladesh may lookout for the market segment of small and medium sea
going vessels for the international market and war ships and patrol boats
for indigenous use, as traditional shipbuilding nations like Japan, Korea and
even China are losing interest in this section of market.

20. Availability of cheap human input is the main strength of this country
and this is one of the main determinants in allowing this labor intensive
industry to flourish. Also, easily trainable workers can provide this country
with a decisive edge over other prospective countries. Shipbuilding lifecycle
around the world has shifted from Europe to Asia and the single most
driving force behind this phenomenon is lower labor cost. Bangladesh is in
very much an advantageous position in this respect as labor cost is the
cheapest among other shipbuilding countries around the world.

CAPACITY DEVELOPMENT OF BANGLADESH SHIPBUILDING

21. The demand in the areas of service & support craft, supply vessels
port servicing g crafts, vessels playing in national waters, fishing f fleets as
well as smaller ships and vessels for short haul and feeder services has
been consistent. The replacement requirement of a large number of small
ships operating in European waters will create a growing demand.
Enforcement o of use of double skin tankers strong desire of fuel efficient
ships and restriction including emission limits to hold good environment and
usual need of replacement will keep the demand growing.

22. Capacity development of Bangladesh Navy. The concept of

capacity development comes as a prime consideration to attain competitive
process cost, reduced time period, application of viable technology with
due prioritization of series of works in any organization. It is the total
integrated effort of men, technology and materials to gain the competitive
advantages by continuous improvement of every facet of organizational
culture and meet the expected necessities. Followings are the probable
areas of development that may be considered on the basis of time and
required opportunity:
a. Computer Automation of Work Orders. The work orders
received from planning and design section need to be automated for
not only demand the involvement of the specific workshop(s) but also
monitoring of the smooth and timely completion of a job. In this
aspect the present process of receiving work orders, estimating cost
and time, detailing shops does not facilitate the management much.
Even it is quite difficult for someone at the higher stratum to know the
actual state of any work order at any instance until otherwise that
particular shop is inquired and tasked to inform. Decision-making thus
sometimes takes unwanted period of time that certainly is an
adversity for the planners of dockyard. The effective use of
computers in managing this aspect for different work stations is yet to
be unexplored.

b. Development of Maintenance Capability of Electronic

Items. It is known that the existing electrical and electronics
shops has the facilities to repair all types of PCBs at the PCB Repair
Station, which is equipped with modern equipments. But as modern,
sophisticated ships has got included in the strength of naval arm and
surely there are more to join, the necessity of a stepping into a most
modernized PCB Repair Station is immeasurably felt. With the rapid
change of the world in the field of electronics, BN controlled
dockyards also needs to ensure technical support from reputed
service provider either in terms of training or trainer.

c. Introducing Central Technical Spares Procurement Cell.

The effectiveness of any repair or maintenance depends
hugely on available supply of reliable, standard spares. These two
aspects assume more significance due to our special nature of
operations. There are repairs where items have been especially
customized by dockyard and original suppliers did not expect that to
be undertaken by the expertise of dockyard. Again supply of items
from indigenous sources does not always meet the workable
specification. Thus in some cases, spares provisioning becomes not
only difficult but also challenging too. As the items are procured by
separate organization and then supplied to the workshop through the
ships’ representative, time taken for any work order may become
longer if the supplied item does not match the required quality. This
also involves additional loss of man-hour and reduces the
productivity.

d. Establishment of Dockyard Technician Training School.

It is so far true the hidden asset that had been building in
value throughout the history of Navy controlled dockyards is their
expertise. They have developed tremendous experiences in many
areas and become the real source of strength of dockyards. Only the
working experience has been the key tool of their success in the
professional fields. But there exists hardly any scope and plan of
imparting training on to them. Due to absence of this important
scheme, at some level, they start failing to understand the variation of
techniques. They become unable to compare their working methods
with the modern methods. They lack in contributing more to the
organization, as the innovation process is not facilitated through
required training. A mid stage training program for the workers, if
comprehensively introduced, is believed to be useful for them to
become more confident and efficient. A dockyard technician training
school, is thereby, needed to be established to conduct different
training modules and packages of different duration.

e. Economical Development of Workforce. Since man

behind the machine would remain the very important concern, the
socio-economic growth of the workforce of the needs to be
understood clearly. Thus the welfare and development of the
workforce fall into the one of the prime objectives and this would
surely demand more attention in her future days. Due recognition of
this trait is essential to reinforce the feeling amongst the yard
employees. Though they constitute a miniature force within the Navy,
yet the all round performance is credible and noteworthy. Any form of
recognition, any financial beneficiary project would surely make them
more committed, devoted to the work and give them a true feeling of
belongingness.

f. Research and Development (R & D) Cell. The changes

made in different systems and machinery either for the removal of
defects or bringing adjustments for further usage always involve
innovation and experiment in procedural applicability. It involves
safety factor too. In many cases, western systems get integrated with
the Chinese spares. The workability of this method entirely depends
on the craftsmanship of the associated personnel. In all these cases,
an active cell of R & D would be thought to be effective. The cell
would therefore look after the technical feasibility of any repair of
unusual nature and also collect data from outside both home and
abroad to develop the installation, maintenance and repair skill. Thus
assimilating information on modern technology and techniques would
facilitate to make the best step forward.

g. Total Quality Management. Quality is a sense of feeling and

recognizing the difference from the previous achievement. It is an
ever changing issue which moves time to time. Thus quality
consciousness has been a major factor in the shipbuilding work that
is undertaken. Towards achieving a better output from the men
behind the advanced machines and technologies in the dockyards,
the synergy of the worker’s motivation and new technology needs to
be welded into the quality assurance program. Yards needs to
attempt to achieve this synergy by adopting the Total Quality
Management. The quality concept is believed to be simple, though
difficult to practice. It requires firstly the standard documentation that
ensures all documented procedures are stated simply and
unambiguously. Then it needs to rethink and review the existing
policies by the planners and management to ensure high quality
services at affordable costs. Cost optimization can only be attained if
the quality aspects are properly accounted for and maintained in the
system. It is no doubt that the lowest cost and highest quality mix
would be the future yardstick of performance of quality assurance.
 Total Quality Management is perceived to be an effective tool for cost
minimization.

h. Safety Management. Safety generally is considered an

element whose influences are of intangible in nature. It encompasses
the aspects of safe equipment and process design, safe working
methods and promoting safety awareness for the workplace. This is
much felt for every individual of a shipbuilding yard as the impact of
safety is directly observed in increasing the productivity. There is a
popular say in the dockyards around the world “People never plan to
fail but fail to plan that causes much to him, to the plant as well” 1.
Thus developing the safety management would effectively
encompass the aspects of ethical obligation (Management feels the
moral obligation to safe guard the employees from hazards), legal
obligation (Abiding the certain laid down government rules) and
financial obligation (Involvement of huge money if any accident
takes place). It is again clearly believed that this would ensure the
followings:

(1) Uninterrupted production.

(2) High moral of people.

(3) No unplanned shut down.

(4) Better labor and management relationship.

Thus a safety wing, size of which may vary upon the complexity of
the activities, needs to be incorporated in the organization. Its role
1
 would be to advise the management on the technical and legal
aspects of safety, to formulate purposeful training programs and
safety campaigns for the improvement of the performance.

LIKELY CHALLENGES OF BANGLADESH NAVY SHIPBUILDING

SECTOR

23. Budgetary Constraint. A country like Bangladesh would

possibly have ever existing budgetary constraints over her military sector.
Allocation of adequate budgetary support to maintain a forceful presence
on the country’s longest but least defended territory, that is sea, has never
been accorded necessary priority. The share of BN in Defense Budget has
been fluctuating from 12 -15 per cent in the last decade .It is strongly felt
that to discharge her ongoing responsibilities effectively at sea and to pace
with the foreseeable maritime challenges, BN needs to be funded more.

24. Absence of Realistic Naval Strategy. Starting a journey towards

achieving a reckonable standard requires total support from the top level
management. Because of the absence of any concrete, realistic naval
strategy our task of development always faces the questions of
requirement in every step. As we have not yet finalized our core objectives,
development plans and programs get materialized discretely.

25. Frequent Rotation of Officers. This is a common trend in BN that

she cannot afford to keep an officer at any appointment for a substantial
period of time. But this unavoidable aspect tremendously hampers the
healthy industrial growth of our Dockyards. As officers are frequently
posted in and out, the true industrial concept of effective management
never gets developed. This frequent rotation causes interruption in all the
phases of planning, formulating and execution. The workforce of the
dockyards thus suffers in lack of belongingness, morale and fails to grow
as a team for a long time.
26. Absence of Conceptual Acceptance. An organization like BN is
yet to accept the philosophy of participative management (where active
participation of the workforce involved in formulating safety rules and
working with risky machinery and environment). Again, some of the top
management seems to be very rigid and unwilling to accept any changes
as they want to dominate the organizational culture from the traditional
point of view. In future, this may be a challenging issue for the
management level as day by day workers have been becoming more
concerned about their safety, security and health hazards. Even it would
not be very surprising if they are found to be vocal due to improper
addressing and inadequate solution of these vulnerable issues.

27. Remarkable Growth of Outside Opportunities. It is already seen

that the ship construction and building sector has attained sufficient pace to
turn into a promising and economically booming sector. Moreover this has
opened up the innumerable windows for the associated people to find
themselves in more lucrative platforms than ever before. Not only the yards
but also the supportive workshops are believed to be increased huge in
number. All these would surely demand more technically sound and
experienced hands in their strength. Thus the issue of retaining the skilled
workers would be more challenging.

28. Recruitment of Qualified Candidates. In the earlier days, the

recruitment of educated and technically knowledgeable people has never
been a big concern. But as the professionally oriented manpower are
gradually converging into the diversified sectors in quest for further career
development, this has all the negative potential to pose adverse effect over
our recruitment process of workforce.

29. Willingness of Technical and Technological Support Provider.

We often say about managing improved and modern technical and
technological support from outside. It thus not only depends on our initiative
and interest but also the willingness of those service providers.
Disagreement in providing any kind of assistance at any level would surely
cause interruption in possessing better platform and capability.

PROSPECTS OF FLOURSHING SHIPBUILDING SECTOR

30. Shipbuilding may be defined to encompass the design & drawings,

engineering, the new building, repair & rehabilitation of ships and various
linkage industries producing any item that may go on board a ship in the
process of building and repair. The prospects has been guesstimated in
money terms for a planned period of ten years

a. New Building earning. There will be 10 shipyards

exporting ships by end of 2013. With 50 yards developed by 2021,
Bangladesh will export 500 ships on an average each of 100,000 dwt
earnings US$ 12.5 billion annually retaining more than US$ 7.00m
equivalent per year. A direct employment of 150,000 may be attained.

b. Repair Earning. In ship repairs, material input accounts for

usually 25%-30% of value of a repair, remaining is for Services i.e.
financing costs, facility cost, utilities and manpower. Thus Bangladesh has
specific interests in developing ship repair facilities. However such facilities
need comparatively higher investments and high level skilled manpower.
Repair industries generally follow a reasonably grown new building sector.
Having g 20 docks/yards each serving 50 ships annually and billing
US$ 5.00 million for each ship served, Bangladesh may earn 5 Billion
dollars retaining about US$ 3.50 US billion. A direct employment
opportunity of 80,000 workforces is foreseen.
 c. Contribution of Linkage Industries. 50 industrial units
totaling both forward and backward links have been conservatively
estimated. These industries will feed the new building and ship repair
industries resulting in an increased value addition, i.e. Increasing
retained earnings in the country and reducing lead time. These industries
will earn foreign currencies by exporting to foreign shipyards as well and
such earnings may well exceed US$ 250 million per year. An
employment of 10,000is envisaged.

d. Benefits of developed national shipping lines. One of the

major spills over benefits of well grown shipbuilding sector is the
involvement of national shipping lines, assuming an addition of 10ships a
year to national shipping lines, a fleet of 200 ships i.e. 2 million tons
carrying capacity is seen developed by 2021. International sea borne
commerce of Bangladesh may well exceed double of the volume of
today i.e. reach to 100 million tons. 25% of these commerce will be
borne by own fleet by 2021 earning about US$ 2.00 billion a year. For
a healthy growth of exports and supplies of raw materials to local
industries, national fleet carrying the commerce is a must. Apart from the
retained earnings, employment benefits and created training scope, the
role which will be played by evolved nation shipping lines in the national
economy is invaluable.

e. Benefits of development of indigenous forces fleet.

Khulna Shipyard and Narayangonj Dockyard introduced new era of
indigenous war ships and patrol boats for Navy, Coast Guard, and
other govt. forces. This success saves hundreds of crores foreign
currency and contributing national economy.

CONCLUSION
31. Bangladesh may lookout for the market segment of small & medium
sea going vessels for new building and repair and vessels operating in
national waters in many countries. This market is more than US$ 100.00
Billion and a US$ 10.00 Billion portion of this market is not difficult to be
secured by Bangladesh (Annex E). Cherishing the firm goal of Bangladesh
to be the 4th largest ship exporters and repair services rendered in 10
years and the number one in the field in 30 years, It can be foreseen taht
the required investments from home and abroad in shipbuilding and repair
industries as well as in forward and backward linkage industries in
Bangladesh. Bangladesh has all the ingredients for labour intensive
shipbuilding and allied industries. With the encouragement of Government,
dynamic entrepreneurship, infrastructural advantages shipbuilding may
take the lead and stand out as the flagship sector of our economy. Soon,
Bangladesh will enjoy the ripple effect of shipbuilding in the form of
expansion in heavy industries. A change in lives of our people, through
industrial employment generation, is expected and inevitable.

RECOMMENDATIONS

32. There should be a proper association of export oriented shipbuilding

industries in the country to maintain mechanism for proper implementation,
monitoring and updating strategy for ship export.

33. To compete with other Asian shipbuilding giants in the sector, Govt.
may allow Bangladesh ships exporters a subsidy to the tune of 20%.
Subsidy will help to get a foothold in the international market.

34. Bangladesh today is paying billions of dollars as freight for her sea
borne commerce, less than 6% of which only is carried by Bangladeshi
ships. Both import and export trades are growing nearly 8% annually but
often under various undue pressures from foreign shipping companies.
India, to its shipping, has been supporting local shipbuilding as well as
shipping by financing 30% of ships’ prices by providing 30% cash
incentives to local shipyards for building any ship longer than 80m.

35. For her industrial growth, infrastructure development, exploration and

extraction of mineral recourses, production & harvest of sea resources and
for a strong navy Bangladesh needs her shipbuilding industry to grow.
Shipbuilding industry, to grow, needs among others, demand for
shipbuilding, skilled low cost workforce, elevated engineering skills, deep
draft basins with access to the sea, a reasonable infrastructure, reasonably
good weather, long term government policy support, an attractive
investment climate, allied forward & backward linkage industries, a strong
financial system, access to the shipping world and courageous
entrepreneurs.
 Iran and the US: In the Shadow of Containment

-Shebonti Ray Dadwal, Research Officer, IDSA

Introduction

In May 1993, the US formally outlined the "dual containment" policy

introduced by Martin Indyk, the National Security Council senior Director for
Near East and South Asian affairs. The policy was targetted at both Iran
and Iraq as the two Gulf states were perceived to be the main threats to US
interests in the Persian Gulf. Though the US regarded Iraq to be the
immediate short-term threat, especially since it had rebuilt its armed forces
to 23 divisions, and now had the strongest Army in the region once again,
and had also started training its Air Force on a daily basis, it was Iran that
the US believed had the potential to be a longer-term threat.1

In March 1995, President Clinton issued orders forbidding US companies to

buy and sell Iranian products, even to third countries, and this became law
a year later, imposing penalties on even foreign companies doing business
with Iran.2 The policy was also widened to cover Libya. It allowed the US
President to choose two penalties from a number of options, including a
ban on exports to the US, on finance assistance to companies doing
business with these countries from Exim Bank and on export licences for
technology. The President could also bar these companies from receiving
loans of more than $10 million by the financial institutions and prohibit
access to US federal government contracts.3

Despite the US' tremendous clout as the only global superpower, it was
disappointed with the reaction to its dual containment policy, especially by
its allies in the European Union (EU) as well as the Gulf and Asian states,
including Japan, sparking off a debate about whether the policy was
successful in containing the states it was directed at. The policy was
especially targetted at Iran, as it was perceived by the Clinton
Administration as the chief perpetrator of Muslim fundamentalist terrorism
worldwide, and worse still, was, according to Israeli intelligence reports,
nearing success in its quest for weapons of mass destruction.

Therefore, on April 10, when a Berlin court implicated the leaders of the
Iranian regime--the Supreme leader Ayatollah Syed Ali Khamenei,
President Hojatoleslam Ali Akbar Hashemi Rafsanjani and Intelligence
Minister Ali Fallahian--for the 1992 assassination of Iranian Kurdish leader
Sadiq Sarafkindi and his three colleagues, in Germany, and, in a knee-jerk
reaction, most of the EU member states decided to recall their
Ambassadors from Tehran for "consultations" the next day, the US was
overjoyed. The Clinton Administration welcomed the EU's stand and even
sent the Assistant Secretary of State, Peter Tarnoff, to various EU capitals
to work out a common strategy and to strengthen their resolve against Iran.
But the US was soon disappointed when barring some half-hearted political
measures, the EU did not impose any economic sanctions against Iran.4

EU's Stand on the Verdict

On April 29, the EU Foreign Ministers meeting in Luxembourg agreed to

suspend all ministerial meetings with Iran and called on Tehran to respect
international law in the wake of the German court verdict. Though they
agreed to allow their Ambassadors to return to Tehran, they put Tehran on
notice that they would not support "business as usual" after the verdict.
They called on Iran to respect basic human rights, asked it to sign the
newly agreed Chemical Weapons Convention (CWC) and abide by pledges
to stop proliferation of weapons of mass destruction. They also reaffirmed
their policy not to grant visas to Iranian intelligence agents, but stopped
short of accepting a British-led effort to secure a commitment to expel or
exclude these agents. The declaration also reconfirmed the long-standing
EU arms embargo.5

The Iranian Intelligence Minister Ali Fallahian accused the US and Israel of
applying pressure on Germany to implicate Iran. Under pressure from the
former countries to get information from Iran regarding the whereabouts of
Israeli pilot Ron Arad whose plane was shot down over South Lebanon in
1986, and who was supposedly now in the custody of the Shia militant
group Hizbollah, Germany had asked Iran for help. When Iran had denied
knowledge of Arad's whereabouts, Germany had implicated the Iranian
government in the Mykonos murder trial. According to Fallahian, "The US
and Israel aimed at securing the release of the Israeli pilot, preventing
Iran's aid to the Lebanese Hizbollah, bringing (Iran) into agreement with the
Middle East peace process and establishing links and negotiations with
Iran...In order to achieve the above objectives, the US, Israel and Europe,
in a concerted move, levelled unfounded accusations against Iran, and
based on the testimony of some counter-revolutionary figures who have
committed acts of terrorism in Iran, launched a smear campaign against
(Iran). It is evident that the Berlin court has been prompted by political
motives to deal with the Mykonos case and conduct the trial. Thus we
attach no validity to it."6

But what was probably more damaging for Iran was the fact that the
Luxembourg declaration emphasised that "under present circumstances
there is no basis" for the continuation of the "critical dialogue" which the EU
member states, under the leadership of the French and the Germans, had
been conducting for the last four years with Iran, despite strident US
objections.7

However, the verdict also showed up the schisms within the EU member
states, which had to struggle to come up with a common agenda against
Iran as well as the difference in policies between the US and its Western
allies. While Britain and Germany took the lead in pushing for something
more than words, supported by Denmark, the Netherlands and Sweden,
France, which has of late shown a marked unwillingness to submit to US
leadership in the Middle East, emphasised the need to maintain contact
with Iran, pointing out that it is a key regional power. Greece, which was the
only EU country not to withdraw its Ambassador after the verdict, and Italy
also support the French position, which led an EU diplomat to comment,
"There is a lot of noise about the need for action, but in the end the
economic relationship is what counts."8

And with good reason. In 1995, the EU exported $11.5 billion worth of
goods to Iran. Germany was in the lead ($1.5 billion), while France ($500
million), Italy and the UK ($400 million each) also exported substantial
amounts.

Iranian exports to the EU stood at $17.5 billion, consisting mainly of oil and
gas. The state-wise break-up was as follows: Italy imported goods worth
$1.35 billion, France--$1.1 billion, Germany--$600 million and the UK—
$200 million over the same period.9

The EU decision not to impose sanctions on Iran has been treated with
contempt by the Iranian government. A week after the verdict, President
Rafsanjani had said that the EU member states would soon go back to
doing business with Iran and this was vindicated by the fact that the
European states chose the least painful of the options they could have
exercised. Iran had banked on the fact that its own internal dynamics are at
such a stage that no state doing business with it would break off an
engagement at this time. With Iran heading for what is probably the most
crucial presidential election since 1979, no country with diplomatic ties with
Iran would like to break off just at this moment, especially with the Majlis
Speaker and the most favoured candidate for the premiership, Ali Akbar
Nateq-Nouri expected to win the election, which in turn is expected to mark
the beginning of a phase where Iran could make radical political
changes.10

Therefore, in the absence of any strong measures against Iran, the EU's
position continues to be at variance with that of the US. Also, though the
EU has also decided to extend its arms embargo on Iran, and has said that
it will refuse visas to Iranian intelligence or security officials, it has also
given its members the freedom to send back their emissaries who had
been "recalled." In the Iranian assessment, this relatively mild response by
the EU has been conditioned by the recognition that there will not be just
one loser if diplomatic ties are cut off. The Iranian media has pointed out
that while the EU accounts for half of Iran's international trade, it could
easily shift its focus of trade to Asia.11

It is no secret that European governments have not been comfortable with

the US' self-imposed hegemony on issues related to the EU's future trading
and political relations with Iran, Libya and Cuba. They view Iran as a
prosperous, growing market which has made impressive economic
progress in recent months and believe that Iranians are economically better
off today than the earlier generation, and that overall there is a growing
quest for better living standards and consumer goods, which makes it a
tempting prosperous market for goods and services. They argue that Iran's
18-year-old Islamic revolution may be running out of steam as pragmatism
takes over, and many in European industry feel convinced that Iran could
soon emerge as one of the most attractive markets in West Asia.

Before the verdict, besides EU states like France, Greece and Italy, even
countries like Australia and Japan had refused to cut off trade ties with Iran.
Now, post-verdict, the Australian Trade and Deputy Prime Minister, Tim
Fischer, insisted that his government was not considering trade sanctions
against Iran and rejected fears that up to $390 million of grain export to Iran
could be threatened. Japan too announced on April 16 that though it was
suspending high level exchanges with Iran, it would not recall its
Ambassador from Tehran. The Hashimoto government is keen on taking an
independent position on Asia-related matters, and Japanese Foreign
Minister Yukihiko Ikeda said that though Japan in essence agreed that Iran
should cut its ties with terrorism, "the method of bringing this about differs
from country to country," and it has constantly been Japan's stated policy to
keep the channels of communication open with Iran.12

Japan has also taken note of the fact that beyond the measures adopted at
Luxembourg, none of the EU members have declared any intention to
adopt sanctions against Tehran despite pressure from the Clinton
Administration. Japan too had refused to support the US law requiring
sanctions against companies that invest $40 million or more in any project
in Iran, even though no Japanese company intends to pump in that much
money into Iran. In fact, for the past three years, Japan has suspended the
disbursement of follow-on tranches of a loan to Iran for the Karun dam
project.13

Are the US Sanctions Hurting Iran?

When Iran came out of the debilitating eight-year war with Iraq from 1980 to
1988, the situation was grim and its economic woes far worse than those of
its Arab neighbours. Though President Rafsanjani tried to open up the
economy by attracting foreign investments and technology, he has not met
with much success, partly because of the US policy and partly because of
internal opposition from anti-West radicals who consider themselves
Ayatollah Rohullah Khomeini's true heirs. Therefore, the power struggle
that has ensued ever since Khomeini's death in 1989 has tended to
paralyse the government between orthodoxy and reform.14

Therefore, when Iran embarked on a rearmament programme, despite its

poor economic condition, it somewhat vindicated the stand of the US and
Israel that Iran's effort to develop long-range missiles was a clear indication
of its aggressive intent. But independent observers believe that it was a
sense of vulnerability following the devastating eight-year war with Iraq and
the damaging US sanctions which was leading Iran to develop this
capability and they believe that at least at present, these weapons are only
capable of being used for defensive or counter-strike purposes.

In fact, there are as yet few takers for the US and Israeli view that Iran's
nuclear weapons programme is in an advanced stage, though its biological
and especially its chemical weapons programmes are at a more developed
stage. International Atomic Energy Agency (IAEA) inspectors have visited
sites where Iran's nuclear programme is being conducted and are even
said to have visited sites which the Iranian Opposition had claimed were
being used for clandestine weapons programmes. So far, the IAEA and
almost every other neutral body says that there is no hard evidence that
Iran has progressed in the weaponisation of its nuclear programme or has
even embarked on one. But critics say that the IAEA had not discovered
Iraq's weaponisation programme till its defeat in 1991.15

Ever since the Islamic revolution ousted the pro-US Shah in 1979, Iran and
the US have been in political conflict, and more so after militant students
seized the US Embassy and its diplomats. The US argues that Iran's
acquisition of submarines, long-range combat aircraft and a whole range of
missiles along with armour and artillery go far beyond the needs of
defensive planning. The tension and mutual distrust is heightened by US
military presence in the region and constant round of exercises with
regional forces. Perhaps the following statement of Colin Powell, former
Chairman of the US Joint Chiefs of Staff, puts the US' perception of Iran in
a nutshell: "In the Middle East and South West Asia, radical politicised
Islam and a politically and militarily resurgent Iran threaten regional stability
and directly challenge a number of US interests, including access to Gulf
oil, political reform and democratic development and settlement of the
Arab-Israeli dispute."

For their part, the Iranians point to the vast sales of arms to US allies in the
Gulf, which far outstrips Tehran's arms spending. Between August 1990
and September 1992, the US sold arms worth $32 billion to its Gulf allies,
justifying Tehran's perception that it is being targetted by the US to avenge
the humiliation of the US hostage crisis in 1979-80, the killing of 250 US
Marines in Beirut in 1983, and the subsequent years of hostage crisis and
last, but not the least, the political havoc wreaked by the Irangate scandal.
And after the bomb blast at the US base in Dhahran in Saudi Arabia last
June, which killed 19 US servicemen, conservative politicians in the US are
demanding that the government takes unilateral military action against
Tehran if it is found to have been involved. So far, there has been no
evidence that Iran was indeed responsible, directly or indirectly.

Nevertheless, externally, Iran has come up against hurdles in investments

and acquisition of technology for its various programmes, including
defence, because of the US sanctions and has had to resort to its own
efforts to build up an indigenous capability for key items.

But it is in the economic sphere that Iran has been hit hardest. Despite
denials by the government, according to Mohsen Yahyavi, Deputy
Chairman of the oil sub-committee of Iran's Parliament, the US sanctions
were succeeding in preventing foreign companies from responding to
tenders for oil exploration and development and consequently a lack of
investment was hindering the country's oil production. In August 1995, Iran
had brought out tenders for 12 projects. Though Oil Minister Gholamreza
Aghazadeh said that about 130 companies from 19 countries had
responded positively to the tender by October 1996, only two big contracts
for Sirri and South Pars had gone to a foreign company, Total of France. A
third, the 60,000 barrels per day (b/d) Soroush oil field is expected to be
awarded to the Iranian Offshore Engineering and Construction Co (IOEC),
a joint venture between the state-owned National Iranian Oil Co and the
Heavy Industries Ministry. However, IOEC will need international financial
backing if it is to fulfill the contract, after a German company backed out
because of the recent diplomatic problem with Iran. Washington is also
examining agreements signed by Turkey and Turkmenistan to build a
pipeline to Iran, to see if they merit sanctions.16

However, analysts say that it is not so much fear of US sanctions that

restricts countries from investing in Iran as an apathy to invest in a country
which faces tremendous operating problems in its oil and gas industries.
Also Iran's rampant inflation and perceived political instability frightens off
potential foreign investors. As a result, official export credit agencies offer
only slender facilities for investment in the country. Coface of France ranks
Iran along with Syria as the West Asian countries where the political risk is
highest for investors in the short and medium term. Also foreign investors
are wary of IOEC as the company is yet to complete a major venture. If the
Total venture is a success, then it is likely that foreign companies will flock
to Iran in the numbers forecast by Aghazadeh.17

Rethinking of US Policy?

Of late, there has been a noticeable shift, especially among influential

members of the foreign policy establishment, that the US should adopt a
more open-minded approach towards Iran--one that holds the possibility of
better relations and even cooperation in the area of energy in Central Asia.
Almost everybody agrees that the policy of "dual containment" has failed to
bring tangible results, as far from softening their anti-Western stance, both
Iran and Iraq--the countries towards whom the policy was targetted--are
doing their best to build up their military strength. On April 22, Iran
conducted three-day amphibious military exercises called Tariq-al-Qods in
which 200,000 Basij and Revolutionary Guards (IRGC) forces took part.
The aim was to enhance the fighting capability of the IRGC and display its
might and defence capability.18

Advocates of a more open policy towards Iran also cite Iran's growing
relations with both Russia and China as a possible counter-balance to its
isolation as another reason for dropping the dual containment policy. In
fact, as the EU was downgrading its relations with Tehran, the Iranian
Speaker Nateq-Nouri was cordially received by Russian President Boris
Yeltsin, who said Russia enjoyed "good positive cooperation with Iran
which shows a tendency to improve," and the Chairman of the Russian
Duma even denounced the latest EU moves.

The Chinese Foreign Minister, Qian Qichen, also announced that his
country would maintain close ties with Tehran despite the verdict and said
that Iran and China "share a tradition of friendship" and that China is "ready
to work with Iran to further develop bilateral relations."19

It is generally believed that China will ignore US complaints and continue to

sell conventional weapons to Iran, which include cruise missiles. The US
acknowledged that China had become the largest seller of conventional
arms to Iran and that it had information of talks between Iran and China
about additional conventional weapons sales.20

The US is alarmed over the latest signs of Russian and Chinese military
cooperation with Iran and have accused China of supplying Tehran with
anti-ship missiles and the material for chemical weapons while Russia has
been accused of providing anti-aircraft missiles. They argue that in courting
Iran, Moscow is trying to cultivate its traditional partners in the east,
perhaps even as a reaction and counterweight to the expansion of the
North Atlantic Treaty Organisation (NATO) which it is against. Iran is an
important commercial and defence partner for Moscow. Tehran already
buys most of its defence equipment from Russia and there is speculation
that it may also buy the famous Russian S-300 anti-missile system to
protect the four nuclear reactors that Russia is building in Iran despite US
objections.21

Russia and Iran also have a common view on sharing the Caspian Sea's
resources, opposing their unilateral exploitation by Azerbaijan and
Kazakhstan. Some analysts have even gone as far as to suggest that
Moscow is trying to build a political axis with Armenia, Iran, India and China
to counter-balance US expansion in the region and point to then Indian
Prime Minister Deve Gowda's visit just prior to Nateq-Nouri's followed by
the Chinese Premier's historic visit to Moscow.

Advocates of the anti-dual containment policy cite the forthcoming Iranian

elections which may propel Nateq-Nouri to the presidency and could lead
to a change in Tehran's foreign policy, as a reason for changing their
stance, and point out the fact that isolating Iran has damaged US efforts to
gain access to energy resources in Central Asia. Iran is the geographical
key to exporting large amounts of oil and gas from the region and they say
that US policy has only succeeded in hampering efforts to wean the new
Central Asian Republics away from Russian influence. They say that by
forcing the cancellation of a $1 billion oil deal between Iran and Conoco in
1995, the Administration has "served no one's interest except those of the
French company, Total" which stepped into the gap, and also put US oil
companies at a disadvantage in their efforts to secure access to the
offshore Iranian energy reserves which have been opened to foreign
investment.

In a recent article in Foreign Affairs, two former US National Security

Advisors, Zbigniew Brzezinski and Brent Scowcroft, have argued against
the dual containment policy and have called for a differentiation in
treatment towards Iran and Iraq. According to them, while Saddam
Hussein's regime poses a "clear and relatively simple immediate threat",
Iran, they say is a more complex geo-political factor and, therefore, has to
be handled more carefully.

Experts on Iran say that the US has already begun the process of
maintaining or renewing contacts with Iran. According to a former Iranian
Premier till 1981 and a leading witness at the recent Berlin trial, Abolhasan
Bani-Sadr, the US, like its European allies, has been conducting talks with
Iran but secretly and through mediators to study the possibility of
normalising relations with Tehran, on condition that Iran stops terrorism and
its nuclear weapons programme. He said that his sources are informants in
the Iranian government and he even goes so far as saying that discussions
on those issues and others have taken place in the German cities of
Hamburg and Frankfurt.

India's Relations With Iran in the Nineties

Till the Shah's fall in 1979, Iran was close to Pakistan and, therefore,
somewhat inimical to India. But after the Islamic revolution, and especially
since the 1990s, both Iran and India seem to have taken a concerted step
towards forming warmer bilateral relations. For India, with its large Muslim
minority, the advantages of sharing warm relations with a theocratic state
like Iran are obvious and its policy towards Iran has more or less been
consistent. But for Iran, there has been a distinct change in attitude,
especially since the last couple of years or so.

Till 1992, Iran seemed to have more or less backed Pakistan, especially on
its stand on Kashmir, but from 1993 onwards, especially since the then
Prime Minister, P.V. Narasimha Rao's visit, when he was treated with
elaborate hospitality, there has been a change, and Iran has even openly
said that it recognises Kashmir as a political issue within India's internal
jurisdiction. The Iranians are unhappy with Pakistan mainly over its
Afghanistan policy as well as the recent outbreak of sectarian violence in
Pakistan. Another point of overriding concern for both is the competition for
influence in the newly independent, energy-rich but underdeveloped states
of Central Asia.

The US view of Iran and its policy of containment does not really affect
India, as both countries have their own reasons for moving towards each
other. Where India is concerned, its interest in Iran is more economic than
political. Iran's large energy reserves--both oil and natural gas--makes it a
very attractive trade partner, given India's large energy deficiency.

On the other hand, India's industrial and managerial strengths and the huge
market potential is of great value and interest to Iran. As an Iran expert
recently pointed out, "India is significant for Iran in the Asian and Central
Asian perspective, much more than China which is a lot less reliable."22
The recently signed tripartite agreement between Iran, India and
Turkmenistan, providing India with a gate- way to Central Asia and giving
Iran a powerful regional ally at a time when it finds itself getting more
isolated internationally, is beneficial for both.

Conclusion

The new direction in Iran's foreign and economic policy towards Russia,
China and India is seen as a move to counter the US bid to isolate it. As far
as these countries are concerned, as well as many countries in Europe and
West Asia, Iran has not shown any indication of becoming the expansionist
regional threat that the US had predicted it would. On the other hand, since
the end of the Iran-Iraq war, Tehran's efforts to rebuild its armed forces and
develop its nuclear weapons programme have not been compulsive.
According to US intelligence estimates, Iran probably spends less than $1
billion a year on its military--less than half of what it announced in 1992 that
it would spend.23

However, what is probably even more worrisome to the US than Iran's

alleged nuclear weapons programme is its development of its Navy, which
has greatly expanded its capability in the last decade. Tehran makes no
secret of the fact that it considers itself to be the predominant force in the
Gulf and that it regards the US as an unwelcome intruder. Its Navy has the
ability to threaten or even briefly stop shipping of oil out of the Gulf.

On April 22, Iran staged one of its largest ever exercises in the waters of
the Persian Gulf and the Straits of Hormuz. Half of Iran's 400,000-strong
force of Revolutionary Guards, took part in exercises which had an
emphasis on the naval aspect. During these exercises, Iranian
commanders had said that though they were not intended as a threat to
anyone, it was a warning that Iran possessed the capability to choke off the
Gulf by closing the straits. Iran is known to have stationed missile batteries
along its coast as well as on the islands of Qeshm, Abu Musa and Sirri. For
some time now, Iran has also been acquiring fast attack missile boats and
is building up its submarine arm through acquisition of three Kilo-class
submarines from Russia.

Of late, many incidents have also taken place between the US and Iranian
Navies which show the potential for conflict these two Navies with different
military perspectives and interests have, and who regard each other as
competitors for the hegemony over a strategic body of water like the Straits
of Hormuz and, in fact, the entire Persian Gulf area.24
Those in the US Administration and analysts who realise Iran's potential for
damage, call for a different approach towards Iran as well as handling
Tehran differently from Iraq. They advocate a clear differentiation between
the regime of Saddam Hussein which poses a "clear and relatively simple
immediate threat" and Iran, which they describe as a more complex geo-
political factor. While they agree that Iran's sponsorship of terrorism and its
nuclear ambitions pose a threat, they advise that these problems "can be
addressed by specific policy instruments rather than by current crude and
counterproductive attempts to cordon off the entire country." Worse still,
they say that isolating Iran has hurt the US' efforts to gain access to energy
resources in Central Asia. Iran is the geographical key to exporting large
amounts of oil from the region and the US policy of isolation has only
succeeded in hampering efforts to wean the new Central Asian Republics
away from Russian influence.25
 THE TRAGIC ATTACK OF HOLEY ARTISAN

INTRODUCTION.

1. For years, Bangladesh has presented a paradox to outsiders.

The small, densely packed South Asian nation is among the world’s
poorest. It is often ranked as one of the world’s most corrupt places.
Its political system has repeatedly been jolted by instability. And its
territory is deeply vulnerable to the effects of climate change.

2. Throughout all this, Bangladesh has also been a source of

positive news. Growth has continued to be firm in recent years, even
as a dangerous new challenge to the Muslim-majority nation became
increasingly apparent — the threat from extremist violence.
Beginning around  2013, a bloody campaign of targeted killings
steadily picked off writers and activists critical of Islam, along with
members of the country’s religious minorities. In many cases, al-Qaeda
and the Islamic State of Iraq and Greater Syria (ISIS) sought to take
credit for the attacks. But the government of Sheikh Hasina time and
again played down the threat from transnational terrorist groups.
Instead, it blamed homegrown radicals and extremists linked to the
political opposition, which historically has had close links with right-
wing Islamists. Security analysts have been concerned about the
situation in Bangladesh for months now, but the targeted nature of the
killings and the government’s stand that it was dealing with an internal
problem have largely kept the issue out of the global spotlight.

3. The tragic attack  on the Holey Artisan Bakery restaurant on July

1 changed that, marking a gruesome escalation in the extremist threat.
Located in the upscale Dhaka district of Gulshan, home to wealthy
Bangladeshis, expats and foreign embassies, it was carefully chosen
for its international clientele. Twenty hostages  were brutally murdered,
most of them foreigners. Nine Italians, seven Japanese, an Indian
national and a U.S. citizen of Bangladeshi origin, along with two
Bangladeshis. Accounts from survivors confirm that the attackers
sought out the foreigners, sparing most of the Bangladeshi’s trapped
inside the restaurant.

Incident Of The Whole Attack In Perspective Of The Perpretratos

4. The attack started at about 21:40 local time. Five attackers entered

the restaurant armed with bombs, pistols, and assault rifles. One attacker
also had a sword. They opened fire indiscriminately and detonated several
of the bombs. Several patrons dove under their tables, while panicked staff
members ran onto the stairs. An Argentinian-Italian chef named Diego
Rossini bolted upstairs, while several restaurant employees followed him.
They then jumped onto the rooftops of nearby buildings. Staff on the
second floor ran and hid inside a restroom. A total of 8 staff members were
hiding inside the restroom. The restroom was warm and cramped, as it was
storing yeast and flour. The staff members inside the restroom began to
text their relatives, stating that they were inside the restroom and pleaded
for help. The attackers then took many hostages, almost all foreigners.
Reports indicate that the attackers were "unfailingly polite and solicitous"
with the restaurant staff and other Bangladeshis. They took the staff into
their confidence, complaining that foreigners, with their skimpy clothes and
taste for alcohol, were impeding the spread of Islam.

5. Alerted by the gunfire, police detective Rabiul Karim and officer-in-

charge Salauddin Khan started to investigate. Other police officers
responded, arriving at the restaurant. The attackers then engaged in a
shootout with the police. Police cordoned off the area around the restaurant
and planned a rescue raid. The attackers however threw grenades and
fired, killing officers Karim and Khan. The gunmen separated the Muslims
from the non-Muslims. The Muslims were given food and water, while the
non-Muslims, were not. On the early morning of 2 July, the attackers began
releasing hostages. A group of women wearing hijabs were released by the
attackers; they offered a young Bangladeshi man, Faraaz Hossain, the
opportunity to leave as well. However, Hossain refused their offer and
refused to leave his friends, who were prohibited from leaving by the
gunmen.

6. The whole incident by the attackers displayed the motive and aim of
them. Their motive was to spread the significance of Islam whereas their
aim was to eradicate all non-muslims from the society. They were
motivated so wrongly by their perpretrators that being educated they had
gone blind.
 Casualties

7. Twenty-two civilians, five terrorists, and two police officers were

confirmed killed, while 50 others, mostly police personnel, were
injured. The two dead police officers included Rabiul Islam, Assistant
Commissioner of Detective Branch of the Dhaka Metropolitan Police, and
Salahuddin Ahmed, officer-in-charge of the nearby Banani police
station. Nine Italian citizens were among the victims. The Bangladesh Army
initially announced that all 20 hostages killed in the attack were foreigners,
and that they were "killed brutally with sharp weapons" by the
attakers. Those who could recite a verse from the Quran from memory
were spared in an effort to only kill non-Muslims. Later a chef of the bakery
was identified among the dead bodies. An injured staff of the bakery died
at Dhaka Medical College Hospital on 8 July 2016.

8. Among the dead were seven Japanese citizens – five men and two
women – who were associated with the Japan International Cooperation
Agency (HICA). One of the women was pregnant at the time. Tarishi Jain, a
19-year-old female student of the University of California, Berkeley, of
Indian nationality, was also killed.

Rescue operation

9. Honourable Prime Minister Sheikh Hasina ordered to carry out an

operation which was named Operation Thunderbolt. The planning of the
Operation was finalized at a meeting between the Bangladeshi Prime
Minister Sheikh Hasina and Armed forces chiefs and top officials of
different law enforcement agencies. The operation was led by 1st Para-
commando Battalion of Bangladesh Army. Members of Bangladesh
Army, Navy, Air Force, Border Guards, Police, Combat Police, Rapid
Action Battalion, SWAT and joint forces started the rescue operation at
07:40 local time. Hundred Army commandos stormed into the bakery with
nine APC, smashing through the wall. A man, living next to the restaurant,
took video of the operation and tweeted it on internet. Within 12 to 13
minutes, they took control over the area. The rescue operation lasted
around 50 minutes. Bangladesh Army chief General Abu Belal Muhammad
Shafiul Huq and the then chief of Bangladesh Navy  Admiral Mohammad
Nizamuddin Ahmed were present in the area during the raid.
10. Thirteen hostages were rescued. Five of the attackers were killed in a
gunfight with the commandos, while the sixth was captured alive. During
the operation one of the bakeries chefs was mistakenly identified as an
attacker and was shot and killed by commandos. Police later identified the
man as a worker in the bakery. Two of the hostages, Tahmid Hasib Khan
and Hasnat Karim, were taken by police for questioning, and subsequently
vanished amidst confusion about whether they had been released or not.

Suspects and arrests

11. BD police carried out continue raid in different places of the country.
On 16 July 2016, Police arrested three people for renting out a flat to the
attackers in Bashundhara Residential Area. The other two were his nephew
Alam Chowdhury and the manager of the building Mahbubur Rahman
Tuhin. Police found sand-filled cartons, which police suspect to be used to
carry grenades thrown during the attack and used clothes in the flat. Police
also suspect that the attackers and their associates stayed in the flat
during Ramadan, and the attack plan was drafted there. On 26 July 2016,
police raided an apartment in Kallyanpur, killing nine and arresting two, all
of whom are believed to be part of the same group that carried out the
Holey Artisan Bakery attack, and who were planning another attack. It is
reported that the police were directly assisted by vigilantes organized as a
"citizen's committee" by the local MP for Dhaka-14, Aslamul Haque.
Participants included members of the Awami League, Jubo
League and Chhatra League.

12. On 27 August 2016, Tamim Chowdhury, the supposed mastermind of

the attack, was killed in a raid on an IS safehouse in Dhaka by Bangladeshi
forces. On 2 September his deputy Murad was killed in another raid in
Dhaka's Rupnagar area. On 6 January 2017, Bangladeshi police shot dead
two Islamist militants including Nurul Islam Marjan, a commander of a
splinter group of the Jamaat-ul-Mujahideen Bangladesh (JMB) which is the
prime suspect and was on a police wanted list for his role in the attack
since July 2016. On the night of 13 January 2017, Bangladeshi
counterterrorism forces have arrested Jahangir Alam, man suspected of
being a key planner of the attack in Tangail District.

Attackers Background
13. The attackers for this attack was the ISIL and the JMB. According
to The New York Times, citing Bangladesh police, the attackers were
named Akash, Badhon, Bikash, Don, and Ripon. ISIL referred to the five
men  which were Abu Omar al-Bengali, Abu Salmah al-Bengali, Abu Rahim
al-Bengali, Abu Muslim al-Bengali and Abu Muharib al-Bengali. According
to The New York Times, pictures of the bodies of the five men, released by
Bangladeshi police, matched five photographs of the men released by ISIL.
But the former home minister of Bangladesh, Asaduzzaman Khan, stated
that the perpetrators belonged to Jamaat-ul-Mujahideen and were not
affiliated with ISIL. They were well-educated and mostly from rich families.
Bangladeshi politicians also blamed opposition groups, like those within
the Bangladesh Nationalist Party, of plotting to destabilize the country by
supporting Islamic extremists like the Jamaat-ul-Mujahideen.

14. The attackers, all in their late teens or early 20s, were identified as
wealthy men from Bangladesh's elite, having attended top private schools
and universities in Bangladesh and abroad.  It was revealed that three of
the attackers came from a privileged background, educated with western
curriculam. Police named the five gunmen who attacked the restaurant as
Nibras Islam, Rohan Imtiaz, Meer Saameh Mubasheer, Khairul Islam and
Shafiqul Islam. One of them Nibras Islam was known as a "fun-loving, in
and out of love, and keen on sport". He attended Monash University in
Malaysia and returned because "he didn't like it in Monash". Nibras' father
was a businessman with two houses in Dhaka, and one of his uncles was a
Deputy Secretary to the Bangladesh Government. It was revealed that
Nibras was following a Twitter account belonged to an Islamic State
propagandist named Mehdi Masroor Biswas, who was arrested
in Bangalore in 2015.
15. Two gunmen were identified as Meer Sameh Mubashir and Rohan
Imtiaz. Both went to Scholastica School which follows Cambridge
International Examinations curriculum. Local newspapers reported that
both of them had gone missing long before the attack. Rohan Imtiaz has
been identified as the son of a politician in Bangladesh's ruling party Awami
League. Police then identified another gunman, named as Shafiqul Islam
Ujjal from Koiyagarhi village, Bogra District. He enrolled at Government
Azizul Haque College in Bogra for graduation after passing higher
secondary examinations. He had left the college later and took up a
teaching job at a kindergarten school in Shajahan Market area in Dhaka.
On 6 July 2016, a video was released by IS from Syria through SITE
intelligence website, where three Bengali speakers warned the
Bangladeshi Government saying "What you witnessed in Bangladesh was
a glimpse. This will repeat, repeat and repeat until you lose and we win and
the sharia is established throughout the world. The jihad that is waged
today is a jihad under the shade of the Caliphate.”
 ROHINGYA CRISIS

Introduction

1. Hundreds of thousands of Rohingya, a Muslim ethnic minority group, are

fleeing persecution in Myanmar’s western Rakhine State, fueling a
migration crisis in Southeast Asia mostly in Bangladesh. Several lakhs of
uprooted Rohingyas, men, women, and children,have been forced to leave
their homeland Arakan and take shelter in Bangladesh.

2. This problem started from military Junta’s widespread violations of

human rights in Myanmar against Rohingya Muslims in Rakhine. The
Rohingya have been settling in Arakan from long before theBritish
occupation of the country. Time has come for the Bangladesh government
to seriously think of the Rohingya refugee issue afresh and deal with it
more meticulously.

3. Government must find a comprehensive solution to the refugee crisis

and must work out a cohesive security strategy to deal with all the potential
threats, otherwise the security of the state will be in serious jeopardy.

Aim

3. The aim of this journal is to analyze and find out an easy way out to
solve the Rohingya crisis in Bangladesh.

Background Of The Crisis

4. In 1978, over 200,000 Rohingyas fled to Bangladesh, following the
‘Nagamin’ (‘Dragon King’) operation of the Myanmar army. This military
campaign directly targeted civilians, and resulted in widespread killings,
rape and destruction of mosques and further religious persecution.During
1991-92 a new wave of over a quarter of a million Rohingyas fled to
Bangladesh. They reported widespread forced labor, as well as
summaryexecutions, torture, and rape.

Impacts On Bangladesh

6. Social and Communal Violence. Rohingya refugees are vulnerable

to human trafficking, food insecurity and health insecurity. Many local
people don’t want to accept Rohingyarefugees, some of whom are
allegedly involved in undesirable activitieslike prostitution , taking and
trading drugs, human trafficking either withinthe local area or on the border,
posing a threat to peace and security ofthe local people. They also blame
the refugees for crime and 2012Ramu violence in Cox's Bazar.

7. Illegal Trade of Drugs and Serious Crimes. The influx of Rohingya

refugee puts more distress on our limited resources and badly affect the
economic growth by illegal trade, smuggling, making fake passports and
national ID’s etc. Rohingya refugees impose quite aheavy burden on
Bangladeshi economy.

8. Threats to the Tourism Sector. Bangladesh believes therefugees

would harm the tourism prospect of the Cox’s Bazar area. TheRohingyas
refugees are adding extra pressure on the existing crisis ofthe land and
forests in the Cox’s Bazar region. Bangladesh has lostconsiderable area of
reserve forest for providing land to the refugees forconstruction of their
shelter.

9. Violations of Laws and Regulations. Large number of

unregistered refugees are posing serious threats to the country’s lawsand
regulations through their involvement in serious crimesincluding drug and
human trafficking, smuggling, robbery etc. The supply of various drugs
specially Yaba increased in atremendous extent.

10. Threaten the National Security. Rohingya refugees are spoilingthe

reputation of Bangladesh in the international arena by committingvarious
crimes under the guise of fake Bangladeshi passport. Therehave also been
confirmed reports that these illegal Myanmar nationalsare obtaining
Bangladeshi passports to go to Saudi Arabia throughfraudulent means,
falsification of national ID cards and birth certificatesand are causing huge
embarrassments to the Bangladeshi communityliving in Saudi Arabia.

Challenges

11. In dealing with Rohingya crisis the following challenges are found
randomly:

a. Stopping Rohingya infiltration to Bangladesh,

b. Stubborn attitude of Myanmar government
c. Local Bangladeshi sympathizers to the undocumented
Myanmar Citizens
d. Keeping the undocumented Myanmar Citizens concentrated in
a place

Conclusion

12. Bangladesh is a Muslim majority country and shares borders with

Myanmar through the Naaf River. Due to religious identity and easy access
of Bangladesh, it has experienced the influx of Rohingya refugees since
1970’. They are one of the distressed ethnic community sufferingidentity
crisis in their country and persecuted, therefore leaving therecountry for the
search of better life.

13. Therecent outbreak of riot and violation of human rights to the

Rohingyasattracted the attention of the world community towards this
issue. Beingthe most neighborhood and the first destination to the
distressedRohingyas Bangladesh is facing the obligations to take the
uneven loadof such discrepancies.

Recommendations

14. The paper has sorted out following recommendations to find

afavorable solution of the situation regarding these refugee issues:
 a. A progressive and optimistic national policy on Rohingya Refugee
should be taken up immediately.
b. Further refugee infiltration should be stopped by all possible
means.
c. Efforts should be taken urgently to organize seminar, symposium
at national and international level to familiarize the issue worldwide
and, thus achieve global support by creating awareness.
d. Bangladesh should expedite its diplomatic effort to bring the
regional powers in confidence as regards to this issue.
e. Involvement of United Nations (UN), European Commission (EC),
South Asian Association for Regional Cooperation (SAARC), and
Association of South East Asian Nations (ASEAN) may be sought to
materialize our refugee repatriation plan.
 PADMA BRIDGE

INTRODUCTION

1. The three major rivers of Bangladesh - the Padma, Brahmaputra-

Jamuna and the Meghna - divide the country into four principal regions of
north-west, north central, eastern and south-west regions. The Padma
River separates the south-west region from the capital city and requires
time-consuming ferry crossings to major destinations. At present,
transportation of passengers and freight across the river is by ferries and to
a lesser extent by launches and manually-operated boats, but their
services are grossly inadequate in both capacity and service level. The
existing ferry services involve long and unpredictable waiting times at
terminals that lack basic service facilities.

2. The Padma Bridge is a multipurpose bridge designed to carry four

lanes of highway traffic, a single freight rail track, a high pressure gas main
and various communication facilities. The Padma Bridge is on the Asian
Highway Route A-1 and Trans-Asian Railway Route. When the railway will
be effectively connected, the Padma Bridge will contribute to the
multimodal international transport network for the Eastern Region of the
Indian sub-continent and substantial benefit to the Government of
Bangladesh (GoB) for bi-lateral cargo movement between India and
Bangladesh.

Requirement

The Padma Bridge will be built to provide road and rail links between
the relatively less developed Southwest region (SWR) of the country and
the more-developed eastern half that includes the capital of Dhaka and the
port city of Chittagong. By facilitating transportation across the river, the
bridge is expected to lead to a greater integration of regional markets within
the Bangladeshi national economy.

The bridge will contribute significantly towards facilitating the social,

economic and industrial development of this relatively underdeveloped
region with a population of over 30 million. The area of influence of the
direct benefit of the project is about 44,000 km2 or 29% of the total area of
Bangladesh. Therefore, the project is viewed as very important
infrastructure towards improving the transportation network and regional
economic development of the country. The bridge has provisions for rail,
gas, electric line and fibre optic cable for future expansion.

3. The project will bring about substantial national development. The

project will enhance economic development in the area, minimize travel-
time between the southern region and the capital city, ensure supply of
utilities, e.g., gas, water, electricity, and accelerate social development.
Enhanced business facilities, spread of educational facilities, marketing of
local agricultural produces to nearby towns.

2. When completed it will be the largest bridge in Bangladesh and the

first fixed river crossing for road traffic. It will connect Louhajong,
Munshiganj to Shariatpur and Madaripur, linking the south-west of the
country, to northern and eastern regions. The project covers three districts
— Munshiganj (Mawa Point/North bank), Shariatpur and Madaripur
(Janjira/South bank). The total area of land to be acquired and required for
its components is 918 hectares. The requisition of land for the construction
yard will be for six years on a rental basis.

Phases

The Project comprises two phases. Phase 1 of the Project includes the
Design Phase leading through procurement action to the award of
construction contracts. Phase 2 is the Construction Phase. Phase 1 of the
project commenced on the 29 January 2009. A dedicated Project Office
was set up in Dhaka in March 2009. A key feature of the detailed design
was the integration of Bangladesh counterparts into the design team, which
allowed the successful training of a significant number of Bangladesh
personnel in all aspects of the project and the subsequent transfer of the
high level of technology involved in this large and complex project.

Regular meetings were also held during the course of the detailed design
with the potential co-financiers for Phase 2 of the project – the World Bank,
Asian Development Bank, Japanese International Cooperative Agency and
Islamic Development Bank - to assist these agencies in obtaining the
necessary approvals within their organisations for loan implementation.

Communications Minister of Bangladesh Government, confirmed that the

government is going to sign a memorandum of understanding (MoU) with
Malaysia on 21 February to construct Padma multi-purpose bridge. Once
the MoU is signed, the loan interest and other issues will be finalised
through negotiation, the minister said while talking to reporters at Roads
and Highways office in the capital. The Malaysian government on 30
January formally offered financing for the construction of Padma bridge
project, which has been welcomed by Bangladesh government.

On 16 July, China Railway Engineering Corporation has proposed

Government of Bangladesh with a better offer than World Bank to build the
Padma Bridge about no interest and 3 years work time feature. The work of
the main bridge is supposed to be completed by the end of 2017 or early
2018.

Key Project Components

The project consists of the following direct components:

a. Main bridge (6.15km long) and transition structures (Bridge End

Viaducts);
b. River Training Works;
c. Bridge Connecting Approach Roads (about 2.3km at Mawa side and
12.8km at Janjira side) and associated structures
d. 6 bridges, 14 culverts, 7 underpasses, and 11 junctions;
e. 2 Toll Plazas ( 1 at Mawa and other at Janjira);
f. 2 Construction Yards (area at Mawa= 81ha and at Janjira=78ha);
g. 2 Service Areas (area at Mawa=27.2ha and at Janjira=63.7ha);
 h. 4 Resettlement Sites (2 at Mawa: RS02: Jashaldia with area 13.96ha,
RS03: Kumarbhog with 15.46ha and 2 at Janjira: RS04:
PaschimNaodoba with area 19.95ha and RS05: Bakhorerkandi with
area 18.45ha, respectively);
i. Future provision of Railway on the lower deck of the bridge; and
j. Provision of utility Crossings (high pressure gasmain and optical fiber
telecommunication cable).

Regional Economic Development Impacts

The operation of the Padma Bridge, will result in significant economic

changes to the southwest region. There will be changes in the relative
prices of production of goods and services, relocation of economic
activities, and generation of new activities other than related to transport
sector.However, in the longer run, reductions in the generalized costs of
transport will:

a. Increase the profitability of local firms which may lead to higher

retained profits, encouraging investment in capacity expansion and
increased output – resulting in increased economic activity in the
region;

b. Result in local firms having reduced costs and lead to a lowering of

prices and an increase in output;

c. Encourage financial institutions to expand lending to firms in the

southwest region, as the costs of doing business for the institutions
are lowered from the improved communications (through reduced
time and effort) – the increased working capital will lead to increased
production;

d. Induce the establishment of new firms in the region through

(1) The improved competitiveness of the region as a business

location, with cheaper transport being substituted for other inputs
such as inventories and warehousing capital;
 (2) The need to service the increased movement of passenger
buses to/from Dhaka and of trucks carrying goods to/from India;

e. Firms may also relocate to the region to reduce the transport costs.

CONCLUSION

The new Padma Multipurpose Bridge will provide a vital missing link in the
transport network of Bangladesh. The bridge will provide significant travel
time savings, particularly between the Dhaka Division to the southeast of
Bangladesh and possibly onto India. The operation of the Padma Bridge,
with its large step change intransport costs, will result in significant
economic changes to the southwest region.

To reduce the amount and the cost of borrowing, the following are some of
the options:

n The Padma Bridge project may be converted into a limited company with
provision for 49 per cent shareholding by the public with preferential
allotment for migrant workers who will send their subscription in foreign
exchange. It will give the people of the country a sense of pride for
participation in the nation-building process.

n Dollar-denominated bonds may be issued for subscription by the non-

residents, including migrant workers, with interest at say 5.0 per cent per
annum which would be quite attractive in comparison to the current level of
low deposit rates in the euro-currency markets. The principal and interest
could be made convertible into taka or dollar on maturity. This option is
expected to keep the cost of borrowing low. The exchange rate of taka is
likely to remain relatively stable for the coming years. In any case, the
savings on interest is expected to offset the exchange risks.  

n Local currency taka bonds may be issued for subscription by the public
with provision for payment of interest at a little higher than that for
comparable government obligations.

I visualise that there would be lots of financial experts eager to put too
many 'ifs' and 'buts' to the suggested or any other financing arrangement.
Regardless of whichever is chosen by the government, it is important that
the work must start before the onset of monsoon.

CRISIS IN KOREAN PENINSULA :

A THREAT TO THE GLOBAL
SECURITY AND WAY FORWARD

INTRODUCTION

1. The Korean Peninsula is in a critical crisis of military economic and political

concerns with global implication. From North Koreas perspective it is surrounded by
world powers to the west and north are China and Russia. Japan is located to the east
and South Korea and military farces of United States is to the south. Possibility of war in
the Korean peninsula has always a source of deep concern for the global security. The
th
peninsula is divided along the 38 parallel after the uneasy armistice of 1953, following
the bloody Korean War (1950-1953). Since the peace treaty was signed between the
two Koreas, a state of war technically still exists. Recent challenges have included a
spectra of economic collapse and a threat to regional and global security.

2. The current nuclear crisis centre upon the development of nuclear weapons and
missile technology by North Korea. The progress poses a direct threat to the region
through the democratic People’s Republic of Korea (DPRK) ballistic missile program.
Since the Koran War began in 1950, the North Korean dictatorship has presented
continuous initiatory and economic challenges to its neighbor. The potential proliferation
of knowledge and components also poses a threat to the international community
recent missile test by DPRK, which is capable of carrying nuclear warhead and
deployment of Terminal High Altitudes Area Defense (THAAD) System in South Korea
has increased the tension in the region and also in the international community.

3. Keeping this context in mind, this paper will initially highlight the genesis of crisis
in North Korean peninsula subsequently it will discuss the cases and impair of the crisis
finally the paper will conclude with the suggestive measures to resolve the crisis.

AIM

4. The aim of this paper is to discuss the genesis of crisis in Korean Peninsula, its
causes and impacts on the global and way forward.

HISTORY BEHIND US-NORTH KOREA RELATION

5. To begin to understand this complex relationship, we have to look back to the

Korean War of1950-1953 – a bloody conflict in which up to 3 million Koreans died, most of
them in the north. About 58,000 US soldiers also lost their lives, as did 1 million Chinese
and about 1,000 British troops.

6. Overview of the Conflict. Korea was liberated from 35 years of fractious

and often harsh Japanese rule when the Second World War ended in 1945. While many
Koreans wanted a self-governing state, much of the country’s prosperity had been built
on the input of its old imperial rulers and by the time Japanese rule had ended Korea
was the second-most industrialized nation in the region, after Japan. But both the
opportunities presented by the country’s industrial strength and its location on the
borders of China and Japan – with whom the US wanted to build trade relationships
after the war – and Russia’s desire to increase its “sphere of influence” meant that the
hopes of a single, self-governed nation were not to be realized. Late 1940s and early
1950s America, spooked by fears of communism, sought to contain what it saw as the
threat of global communism, and this division led to Korea being split into two along the
38th parallel. Effectively, North Korea became a Soviet-supported communist regime
led by Kim Il-sung, grandfather of current ruler Kim Jong-un, while South Korea became
a US-backed attempt at democracy under Syngman Rhee.

7. The Road to a Cold War. Tensions were never far from the surface and various
factions sought to unify the country. A widely accepted version of the story says that on
June 25 1950, armed with Soviet weapons, North Korea crossed the 38th parallel
border in an attempt to take over the whole territory. However, it is probable that the
eventual outbreak was the result of a gradualescalation of hostilities by both sides over
time. In 1950, with the Soviets boycotting the UN Security Council over a decision to
exclude China from membership, Harry Truman, the US president, was able to secure a
resolution to use force against North Korea and the war began. In many ways this was
the official start of the Cold War, in which the US and Russia used others to engage in
conflicts because of fears that a direct war between the two sides would escalate to all-
out nuclear war.

8. Effects of the Cold war and Casualities . The conflict was bloody, with the US
carpet bombing its opponent’s cities and civilians with more than 635,000 tons of
explosives, including 32,557 tons of napalm. By comparison, in the Second World War,
it had used 503,000 tons in the South Pacific over a much larger area. As well as
setting the template for later Cold War tensions such as the Cuban Missile Crisis of
1962 and the Vietnam War of 1965-73, the Korean War left a visible divide between the
two halves of Korea in the Demilitarized Zone, a heavily fenced and land-mined 4
kilometer separation strip guarded on both sides. Following the armistice, the Republic
of Korea, known as South Korea, and the Democratic People’s Republic of Korea,
North Korea were created. Both were officially admitted into the UNGeneral Assembly in
1991. But the conflict left feelings of anger and hatred on both sides as many families
were forcibly separated, some never to be reunited, while in the North the blanket
bombings of the Korean War and the imperialist Japanese rule are still sources of
rancor. Many North Koreans still view the US bombings as war crimes.

9. The Tensions Continues. While the US, Japan and their allies helped to
rebuild South Korea, the North turned to Russia, China and the nations in the
Communist sphere of influence, which between them supplied almost 880 million
rubbles as well as manpower and technological input. The result, according to historian
Charles K Armstrong, was that: “In the late 1950s North Korea’s growth rate of total
industrial output (averaging 39% between 1953 and 1960) was probably the highest in
the world.” But tensions, which even today run broadly on the lines established in the
Cold War, have always kept the US and North Korea at loggerheads.

CUASES OF THE CRISIS

10. Unresolved Outcome of Korean War. The primary cause of the crisis is the
unresolved issue of Korean War (1950-1953). After 65 years since the end of the war a
peace agreement is still not being signed. Only one armistice agreement exists.
Moreover there are no diplomatic relations between the main warring parties, the USA
and North Korea.
11. Influence of the Super Powers. The super powers have greatly influenced the
fate of Northand South Korea. China and Russia have influenced the activities of North
Korea who chooses the bargaining model of relations with the international community.
On the other hand, US has it’s all out support for South Korea. Moreover Japan has
also become a stack holder for its very geographical location in Korean Peninsula.

12. Sense of Insecurity By North Korea. The deployment of US troops in the main
land of South Korea has been always a matter of great concern for North Korea. North
Korea in included in the list of ‘Axis of Evil’ by US. Again the continuation of joint
exercise between South Korea and US has deepen the issue. After the end of Cold War
the influence of Russia over North Korea has significantly reduced.

13. Dimension in the Regime. North Korea wants to dominate the Korean
Peninsula as a military might. North Korea has drastically altered the military balance in
its favor of the peninsula and has gained immunity against the action of the South. But
South Korea also decides to derail the issue seriously because of the stubborn attitude
of North Korean’s Young Leader. Such attitudes are now wide spread and consequently
supported by South Korean public opinion.

14. Economic Break Down of North Korea. The economic condition of North
Korea has always been an issue since the Cold War. As a result Pyongyang has
prepared itself as a bargaining chip in front of international community. On the other
hand the economic condition of South Korea has improved drastically crating a huge
difference with North Korea. To gain sound economy stability North Korea crates unrest
in the Peninsula.

CURRENT NORTH KOREAN CRISIS

15. North Korea's Nuclear Weapons Program. On 2nd January, 2017, Kim Jong-
un, the leader of North Korea, said that the country was in the "last stage" of
preparations to test-fire an intercontinental ballistic missile. On May 3, North Korea issued
a rare and harshly worded criticism of its chief ally, China, stating that "One must clearly
understand that the DPRK.'s line of access to nukes for the existence and development
of the country can neither be changed nor shaken and that the DPRK. will never beg for
the maintenance of friendship with China, risking its nuclear program which is as
precious as its own life, no matter how valuable the friendship is. China should no
longer try to test the limits of the DPRK's patience. China had better ponder over the
grave consequences to be entailed by its reckless act of chopping down the pillar of the
DPRK-Chinarelations." The harsh commentary also accused the Chinese media (which is
tightly controlled by the government) of dancing to the tune of the US. In early August
2017, the Washington Post reported an assessment, made by the US.
16. Sanctions on North Korea; Trade with China. Since North Korea's first nuclear
test in 2006, the UN Security Council had passed a number of resolutions that imposed
various sanctions on the DPRK, including restrictions on economic activity.
Nevertheless, North Korea's gross domesticproduct grew by an estimated 3.9 percent in
2016, to about $28.5 billion, the fastest pace in 17 years; the progress was largely
attributed to continued trade with China, which accounted for more than 90% of North
Korea's international trade. In April 2017, China said that its trade with North Korean
had expanded. In 2017, North Korea was sanctioned several times by the UN Security
Council. The most recent ones were introduced on December 22, 2017. According to
this resolution, oil supplies to the DPRK are prohibited, and all countries have decided
to expel North Korean labor migrants from the territories of the countries where they
work within 24 months. China has been opposed to secondary sanctions that may be
imposed on Chinese firms that do business with North Korea.

17. THAAD in South Korea. Ostensibly to counter North Korea′s missile threat,
United StatesForces Korea (USFK) had been planning deployment of the Terminal High
Altitude AreaDefense (THAAD) in South Korea, which is designed to detect and destroy
intermediate-and medium-range ballistic missiles (not intercontinental ballistic missile).
The deployment had faced strong oppositions from China, Russia, and North Korea. In
late April 2017, it was reported that while THAAD had originally been scheduled to
become operational by the end of 2017, this could occur sooner. According to US
Forces Korea′s announcement, THAAD stationed in South Korea had reached initial
operating capability (IOC) on May 1, 2017.

18. USS Carl Vinson's movements: April 2017. On 5 April 17North Korea′s test-
firing of a medium-range ballistic missile from its eastern port of Sinpointo the Sea of
Japan increased tensions as U.S. president Donald Trump had said the U.S. was
prepared to act alone to deal with the nuclear threat from North Korea. On April 9, the
U.S. Navy announced it was sending a navystrike group headed by the USS Carl Vinson
super carrier to the West Pacific. On April 24 the Japanese destroyers Ashigaraand Sa
mid are participated with the USS Carl Vinson in tactical training drills near the
Philippines; North Korea threatened to sink her with a single strike.

19.ICBM test-flight on 4 July.On 4 July 17,North Korea first publiclyannounced flight

test of its ICBM Hwasong-14,timed to coincideIndependenceDay celebrations. This
flight had a claimed range of 933 kilometers (580 mi) eastwards into the Seaof Japan
(East Sea of Korea) and reached an altitude of 2,802 kilometers (9,193,000 ft) during a
39-minute flight. The US government experts classified the missile launch as a big step
in Pyongyang’s quest to acquire a nuclear-tipped weapon capable of hitting the U.S.
from atotal distance of around 2,700 km before crashing into the Pacific. The missile
was not shot down by the Japanese military.
20. Sixth nuclear test. On 3rd September, 17, the United States Geological Survey
reported that it had detected a magnitude 6.3 earthquake in North Korea near the
Punggye-ri test site. Given the shallow depth of the quake and its proximity to North
Korea’s primary nuclear weapons testing facility, experts concluded that the country
had conducted a sixth nuclear weapon test since the country first exploded a nuclear
device in 2006. North Korea claimed that they had tested a hydrogenbomb capable of
being mounted on an ICBM.

21. Missile test over Japan on September 15. On September 14, North Korea
issued a threat to “sink” Japan, and turn the US to “ashes and darkness”. The next day,
an IRBM was fired from near Pyongyang and flew over Hokkaido, Japan before
splashing down in the western Pacific about two thousand kilometers off Cape Erimoat
about 7:16 am local time. The missile travelled 3,700 kilometers (2,300 mi) achieving a
maximum apogee of 770 kilometers (480 mi) during its 19-minute flight. It was the
furthest any North Korean IRBM missile has gone above and beyond Japan. On
September 18, North Korea announced that any further sanctions would only cause
acceleration of their nuclear program.

22. US and China Agree on "Pressure". On September 18, the White House said
PresidentDonald Trump and Chinese president Xi Jinping had discussed North Korea's
continued nuclear weapons and ballistic missile tests and committed to "maximizing
pressure on North Korea through vigorous enforcement" of UN Security Council
resolutions on North Korea; North Korea said the sanctions would accelerate its
nuclear program.

23. Trump’s speech at UN GA, and Kim Jong-un’s response. On September 19,
Donald Trump, in his first address to the United Nations General Assembly, said that the
United States: “if it is forced to defend itself or its allies, we will have no choice but to
totally destroy North Korea.” US president Donald Trump signed an executive order that
further toughened U.S. sanctions against North Korea: the U.S. Treasury was thereby
authorized to target firms and financial institutions conducting business with NK . On
September 21, responding directly for the first time to President Trump’s threat , North
Korea’s leader Kim Jong-un in his capacity of Chairman of State Affairs of DPRK called
Trump “the mentally deranged US dotard” and vowed the “highest level of hard-line
countermeasure in history.” Foreign Minister Ri Yong-ho likewise alluded to Trump as a
barking dog, and furthermore remarked that North Korea might be considering the
largest test of a hydrogen bomb ever in the Pacific Ocean, which would constitute the
first atmospheric nuclear test in the world since 1980 (last performed by China).

24. Third ICBM test. On November 28, North Korea conducted its third
intercontinental ballisticmissile test. The missile was said to have flown to a record
altitude of 2,800 miles and landed in the Sea of Japan into the exclusive economic
zone, a distance of 600 miles. Initial assessments, if fired on a normal trajectory, would
be able to reach anywhere in the continental United States.
25. 2018 State of the Union Address. In his first State of the Union address,
President Trump devoted much time to North Korea, stoking fears that an American
strike was under serious consideration and not mere saber-rattling, particularly given
[151]
the withdrawal of Dr. Victor Cha as Ambassador to the Republic of Korea and its
similarity to George W. Bush’s Axis of Evil 2002State of the Union Address.

26. Planned Summits and De-escalation. On March 8, in a surprise departure from

the hostile dialogue during 2017, Trump announced that he would meet with leader Kim
Jong-un, and the two will meet likely by May. Press secretary Sarah Huckabee Sanders
said that "in the meantime, all sanctions and maximum pressure must remain.” North
Korea accepts South Korea's proposal to hold the high-level inter-Korean talks, which
took place on March 29.

27. Inter-Korean Summit. On April 27th, the two leaders met at the Joint Security
Area, with Kim Jong Un crossing the MDL in South Korean territory, the first time a
North Korean leader has done so. President Moon also briefly crossed into the North's
territory. Both Moon and Kim signed the Panmunjom Declaration, declaring the Korean
conflict over and to sign a proper peace treaty by the end of the year. With that, Moon
agreed to visit Pyongyang in the fall.

28. Means of Reunification. There are number of countries at hostile relationship

worldwide due to the after effect of World War and international disputes. The US
hostility towards DPRK derives from an inveterate and deep-rooted sense of rejection of
the other party. Military dictators of North Korea always want to solve the problem in
military way. This a faulty plan which aggravated the crisis.

29. Quest of Recognition. According to North Korea the US targets the North Korea
survival and developing itself beyond its nuclear weapon. Secondly the US hostile policy
towards the DPRK is an extremely risky policy. This attitude of US has forced North
Korea to be recognized by world community. However, North Korea attempts to
establish it by using the military might instead of dealing the issue diplomatically.

IMPACT OF THE CRISIS OF GLOBAL SECURITY

30. Shifting the Balance of Power. The crisis in the Korean Peninsula remains as a
source of deep concern for the global security. China, Russia, US and Japan are
directly involved with the issue. US has already deployed the THAAD system in South
Korea. Russia is acting as a silent agent. China the old friend of North Korea sometimes
speaks against the nuclear projects. Japan is also coming into play because of its
economic stability.
31. Threat to Nuclear War. Despite multiple efforts to curtail the explosion of
nuclear project Pyongyang has conducted five nuclear tests recently. North Korea has
already launched its sixth missile successfully to provoke the world community specially
US. This is really posing a threat to nuclear war.

32. Threat to Neighboring Countries. Apart from South Korea, North Korea also
has issues with Japan with missile tests perform by Pyongyang in March 2017 causing
four military projectiles to enter the economic zones of Japan. Shinzo Abe, the
Japanese Prime Minister reacted by calling the move ‘An extremely Dangerous Action’.

33. Probability of a Second Korean War. United States and North Korea both are
adamant. USA may take the inspiration from CUBA that by employing military pressure
any entity can be forced to abandon its plan. On the other hand, Korea may take lesson
from Lybia, when Guddafi was brought down two years after he made an agreement
with USA. Kim wants to protect regime as well as the image of the country in the world
community. To make matter worse Pyongyang has repeatedly threatened to attack
mainland America with its intercontinental ballistic missiles capable of delivering a
nuclear warheads.

34. Effect on World Economy. The crisis of Korean Peninsula has a great impact
on World economy. One of the first Signs that investors in the Asian markets are lacking
confidence is a rise in demands and therefore the price of the Japanese Yen. Investors
look to the Japanese Yen as a safe heaven US trade relations with China is also
affected by the crisis.

35. Effects on World Peace. The world is now burdened with lots of problems. The
crisis is Middle East, rising of terrorism, religious extremism, climate change Electra
have taken foots on global peace and stability. The issues of conflicts in the South
China Sea and Brexit also very pronounced now a days. The crisis in the Korean
Peninsula has added new dimensions in the problems infected world. So the world
community is deeply concerned about the security situation.

SUGGESTIVE MEASURES TO OVERCOME THE CRISIS

36. Role of United Nations. The United Nations Security Council already gave
sanction of oil. United Nations has to be more active to bring the stake holders in the
same table to solve the issue as quickly as possible.

37. Role of the Super Powers. The Super Powers have major role to play in order
to the restrain North Korea from unstabling the global Peace. Donald Trump wants a
complete freeze on North Korea’s nuclear and missile programs. On the hand North
Korea wants to be treated as a nuclear armed power. It would be wrong for USA to
compare North Korea situation to that of Iraq in 1991. Iraq was virtually and completely
isolated both diplomatically and geographically. On the contrary North Korea has one of
the powerful countries in the world as its ally, which is China. Russia should also extend
the helping hand to solve the issue in order to maintain global peace and stability.

38. Retroactive Diplomacy. It is time to abandon coercive diplomacy and develop

an approach that can be described as restorative diplomacy. Coercive diplomacy relies
on a zero/sum calculus of military threats, sanctions and a variety of punitive measures.
Restorative diplomacy adopts a win/win approach that seeks to find mutual benefits for
both sides.

39. Guarantee of Bilateral and Regional Security.The first and foremost step
should be bilateral and regional security guarantees to the North Korean Government
ensuring that the country would not be attacked and that its sovereignty would be
respected. This could be done with confidence building measures. US and South Korea
should halt their joint military exercises in the vicinity of the North Korea. In addition, US
and Japan could offer North Korea additional benefits, foods, medicines and clean
energy technology. China could play a positive role by hosting the negotiations,
including possibly inviting the leader of North Korea to participate.

CONCLUSION

40. The Crisis in the Korean peninsula has become a matter of great concern for the
world community. In the year 2017 North Korea carried out sixth nuclear test and
number of missile test. It is also developed the technology to create miniaturized
nuclear devices and an intercontinental ballistic missile capable of reaching us
mainland. If things go on this way, it is predicted that north Korea will have an Arsenal of
over 100 nuclear weapons by 2020. The first nuclear crisis on the Korean peninsula
development, the second crises ensued one the country's uranium enrichment program
was exposed in 2002, and now the world is witnessing the third crisis are Pyongyang's
nuclear program.

41. No doubt, problems and even crisis in the world that go away on the own. The
North Korean nuclear issue is not one of them. Alarmingly, tensions between the United
State and North Korea have again reached crisis proportions the United State wants
North Korea to curtail any further development of its Nuclear Weapon programs as well
as to stop testing its missiles, North Korea evidently seeks to bolster its security by
acquiring a sufficiently robust deterrent capability of discourage on attack by us. The
unpredictable leaders of both countries are passing extremely pro vocative and
destabilizing patterns of behavior. The crisis has devastating impact on the peace and
stability of the world. There is a possibility of power and disrupt the smooth function of
world economy.

42, It is urgent that all governments concerned make a sober reassessment in a

timely manner. It is time to practice restorative diplomacy to resolve the issues. The
nine countries of the world who are in possession of nuclear weapons should sit
together for an amicable solution. From Kim’s point of view the only thing standing
between him and on American led “invasion” is has nuclear arsenal. the only way out to
this situation for China and the United States is to work out a deal with North Korea that
world grantees a non- aggression pact between North Korea and outside power, in
return for a freeze/discontinues the nuclear program. Full diplomatic relation may be
some way away but a denuclearizing process could pave the way for relations onetime
in future.

Bibliography:

1. www.dailypioneer.com – article on “Crisis in Korean Peninsula”

2. www.crisisgroup.org-- article on “ Korean Peninsula”

3. “2017-18 North Korea Crisis” - Wikipedia

4. “Korean Conflict” – Wikipedia

5. www.ukessays.com -- Essay on “Background History of Korean Peninsula”

Author’s Biography

Lieutenant HomiraAsimaPrapty,(L),BN was commissioned on 23 December 2013 with 2012A

cadet entry course in the Branch of Electrical, Bangladesh Navyy. She completed her BSC in
Electrical Electronic and Communication engineering from Military Institute Of Science and
Technology( MIST). At present she is doing Watch Keeping on board BNS OMUDRAJOY.