Prime Minister to visit Japan tomorrow, raising hopes for fresh investment momentum

Prime Minister Tarique Rahman will leave for Japan tomorrow, 26 October, on a four-day visit. Alongside a summit meeting with Japanese Prime Minister Sanae Takaichi, he will visit a Toyota factory and a JERA LNG terminal.

During the visit, Japan’s revamped ‘Big-B’ initiative centred on the Bay of Bengal is set to move forward. The updated plan brings investment, energy, maritime security and geopolitics together under a single framework.

Diplomatic sources in Dhaka and Tokyo said the Bay of Bengal Industrial Growth Belt (Big-B), launched in 2014 at the initiative of then Japanese Prime Minister Shinzo Abe, is being updated around four pillars. The revised framework may be reflected in a joint statement following the formal meeting between the two countries’ prime ministers.

At the invitation of Takaichi, Tarique Rahman will visit Japan from 26 to 29 October. During the visit, he will deliver the keynote address at the Japan-Bangladesh Economic Forum and visit an LNG terminal and power plant in Futtsu, Chiba. Bilateral talks with Takaichi are scheduled for 27 October.

Japan has long been one of Bangladesh’s most reliable partners in infrastructure development. Major projects supported by Japan include the Matarbari deep-sea port and power project, the Dhaka Metro Rail and the third terminal of Hazrat Shahjalal International Airport.

Diplomatic sources said Tokyo’s role had previously focused largely on loan-based assistance, but the emphasis is now shifting towards commercial partnerships and public-private partnerships (PPPs). The Bangladesh-Japan Economic Partnership Agreement (EPA) was signed in February this year.

Japanese media outlet Nikkei Asia reported that Japan’s private sector is drawing up plans to invest around one trillion yen in Bangladesh over the next five years, equivalent to approximately Tk 770 billion at current exchange rates.

According to diplomatic sources, a substantial share of the planned investment will go to manufacturing and energy. Japanese automaker Toyota is planning to invest around USD 500 million in an assembly plant in Bangladesh.

People familiar with the matter say that if local suppliers secure contracts to manufacture components and cables, this could help develop a strong network of supporting industries, known as backward linkages. It could also create jobs for young engineers.

Gas shortages in the industrial sector are a major constraint on Bangladesh’s growth. To help address the problem, JERA, Japan’s largest energy producer, has reportedly proposed building an LNG terminal and related infrastructure in the Maheshkhali-Matarbari area.

If implemented, the project could ease pressure on gas and electricity supplies to industry. However, volatility in global energy markets and the cost of the US dollar will remain major challenges.

The original Big-B plan in 2014 was largely focused on developing industry and port facilities around Matarbari. Diplomatic sources from both countries said it was now being updated around four pillars in view of the Bay of Bengal’s growing strategic importance.

First, regional connectivity and integrated logistics will be prioritised, with the aim of turning the Matarbari deep-sea port and LNG infrastructure into a hub for international trade. One objective is to facilitate the movement of goods to and from India’s northeastern states, Nepal and Bhutan.

Second, the plan aims to strengthen resilience and geopolitical stability, preparing Bangladesh to serve as an alternative maritime route in the event of natural disasters, global conflicts or supply-chain disruptions.

Third, it seeks to establish modern rules for public-private partnerships and business, reducing bureaucratic obstacles while ensuring internationally recognised, rules-based procedures.

Fourth, it aims to promote regional peace and maritime security by ensuring free and safe navigation in the Bay of Bengal. Japan has already handed over five patrol vessels to the Bangladesh Navy.

A diplomatic source in Tokyo said the visit could also advance arrangements for providing the Coast Guard with a modern 35-metre patrol vessel.

The strategic significance of Big-B lies in the geographical position of the Indian Ocean and the Bay of Bengal. The bay is not only a gateway for Bangladesh’s trade but also a major maritime route connecting South and Southeast Asia.

China is expanding its infrastructure presence and influence in the region through its Belt and Road Initiative (BRI). Japan and its allies, meanwhile, have promoted the concept of a Free and Open Indo-Pacific (FOIP).

Diplomatic sources from both countries told this correspondent that Bangladesh is important to Japan as a reliable and economically self-reliant strategic partner in maintaining its position in the Bay of Bengal. Matarbari in Cox’s Bazar lies at the heart of this strategy.

Once fully operational, the deep-sea port and energy hub could boost not only Bangladesh’s imports and exports but also become an important route for transporting goods to and from northeastern India. This could reshape regional supply chains and create alternative trade routes across South Asia, potentially positioning Bangladesh as a regional logistics hub.