How Bangladesh is handling a ‘mix of diplomatic relations’ with an aircraft deal

While it is supposed to discharge only “regular duties” as an interim government, just three weeks before elections Bangladesh’s Cabinet approved one of the most important deals of the year for the country – the draft of the Bangladesh and the EU aviation agreement. Two days later, The Daily Star broke a story on how Bangladesh, despite being cash-strapped, has agreed in principle to buy two A350-900s for roughly $800 million.

Earlier, in September 2023, visiting French President Macron thanked Bangladesh for committing to buy 10 A350 aircraft from Airbus. The commitment was made before Bangladesh’s national carrier Biman, which has not been paying dues for years, could complete its technical and financial evaluation for adding Airbus to its Boeing-dominated fleet.

Unlike those who have offered other justifications for the expensive deal with Airbus, the Minister in charge of civil aviation offered an honest confession to his colleagues. He reportedly said, apart from other reasons, the deal is to handle a mix of diplomatic relations.

How the deal is helping Bangladesh to “handle a mix of diplomatic relations” ahead of a controversial election is an interesting tale indeed.

The Global Supply Chain of Airbus

State Minister of the Ministry of Civil Aviation Md Mahbub Ali said at the November 15 meeting of Biman that the French President, the European Union (now being headed by a German), and a British parliamentarian, were all interested in this deal. The supply chain of the A350-900 can explain their interest.

The vast majority of wings for the A320, A330, and A350 families are manufactured at Airbus’ plant in Broughton in the United Kingdom. Besides, the UK’s Rolls Royce produces Trent XWB, the aero engine used to run the A350s of Airbus. Airbus claimed it contributed £5.6 billion to the UK’s GDP in 2020 despite the COVID-19 lockdown and supported a total of 86,400 jobs across the country.

The wings prepared in the UK would be then perfected with high-lift systems at Bremen, Germany. The fuselages for the aircraft would be produced in Hamburg, Germany. In total, Germany owns 11% of Airbus’ shares.

After getting the tail from Spain’s Getafe, and other parts from Germany, France and the UK, the A350 would be assembled in Toulouse, France. While the production of other parts of the plane involves many other countries, the “home” of Airbus is these four countries which are also the key beneficiaries.

An additional point of interest is that the European aircraft manufacturer does not have any footing in Bangladesh. The purchase of these 10 planes will formally open up Bangladesh’s market for Airbus, hence, the deal seems to be important for the European countries.

A Marriage of Convenience

The deal is surely a win for France, who owns 11% of Airbus, and its European partners. But why is Bangladesh’s cash-strapped national flag carrier succumbing to the “diplomatic pressure”?

After the US announced it would impose visa restrictions on people who undermine Bangladesh’s democratic election process, speculations on the imposition of similar restrictions from other countries in the West ran rife. This was especially true after the EU Ambassador in Bangladesh stressed the importance of free elections for GSP Plus.

While the US contributed to around 17% of the export earnings of Bangladesh in the last financial year, EU member countries contributed to more than 50% of the export earnings.

If the EU partially withdraws Bangladesh’s preferential arrangements, as did from Cambodia, after the lopsided 2024 elections for violating Article 25 of the International Covenant on Civil and Political Rights, and for the non-compliance of several labor rights issues including the systematic harassment and killing of RMG workers for asking for a pay rise, that will reduce Bangladesh’s export earnings from Europe, severely impacting the economy.

Besides, several Bangladeshi politicians, businessmen and senior officials are reported to have their immediate families and assets in the West, particularly in Europe. If the US starts imposing visa restrictions after the election and their allies in Europe follow suit, that will negatively impact the Bangladeshi oligarchs.

Hence, as it appears, Bangladesh is presumably trying to buy the post-election silence of Europe with the deal to save the economy in general and the interest of its oligarchs in particular.

ABOUT AUTHOR: Aaqib Md Shatil is a Research and Communication Officer at the Sydney Policy and Analysis Centre
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