In the vast expanse of South Asia, relatively few Australian observers have been paying close attention to the region’s domestic politics. However, the increasingly intertwined economic and strategic future between Australia and its western neighbours in South Asia demands closer scrutiny. Over the next nine months, a series of elections in Maldives, Pakistan, Bangladesh, and India will hold significant consequences for the respective countries, the region as a whole, and Australia’s interests in the area.
Decoding Maldives election
The first election on the docket is the presidential election in the tiny island state of Maldives, scheduled for September. The contest features incumbent President Ibu Solih against former President Abdulla Yameen, who is presently serving time on corruption-related charges. Recent developments have thrown the opposition into disarray as the country’s Election Commission disqualified Yameen from running, strengthening Solih’s chances of victory (though uncertainties still exist).
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For many foreign observers, this election is viewed primarily through the lens of a contest between India and China. Prior to his defeat in 2018, Yameen was perceived as aligning the Maldives with China’s sphere of influence. Conversely, in recent years, President Solih has shown a decisive tilt towards India and its Quad partners, including Australia, Japan, and the United States.
However, it is a mistake to oversimplify the Maldives election as a mere proxy contest. Despite its small size, Maldives pursues its own interests and maintains an independent foreign policy. A victory for Solih would allow the country to continue strengthening its governance and democratic institutions. Furthermore, it would likely foster an environment more conducive to greater Australian engagement on critical issues like maritime security and climate change.
Looking beyond Maldives, the upcoming elections in Pakistan, Bangladesh, and India also bear significant relevance for Australia’s interests in the region. These nations are key players in South Asia and are likely to impact the regional dynamics in various ways. Pakistan and Bangladesh, in particular, hold strategic importance due to their geographic location and geopolitical influence.
As a considerable number of Australian observers focus on the India-China rivalry during these elections, it is essential to acknowledge that each country’s political developments will shape its own trajectory and foreign policy decisions. Consequently, Australia must be prepared to adapt its engagement strategies based on the evolving political landscape in the region.
Pakistan’s electoral challenges
As the string of elections in South Asia continues, the spotlight now turns to Pakistan and Bangladesh, where crucial political developments are set to shape the region’s landscape and have implications for Australia’s economic partnerships.
In October, 2023, Pakistan is due to hold general elections, presenting a challenging scenario as incumbent Prime Minister Shehbaz Sharif, backed by the Pakistan Army, faces a diverse range of challengers. The political and economic crisis in the country adds further complexity to the electoral process. Previous attempts to arrest former Prime Minister Imran Khan on corruption charges sparked nationwide riots, and though Khan remains popular, the Army has taken decisive action against him, leading to the arrest or exile of his party leaders.
Adding to Pakistan’s woes is a balance of payments crisis, exacerbated by global energy and food price hikes. The country’s substantial foreign debts, including to China, have pushed it to the brink of default, with limited support from traditional allies in Washington and the Gulf, as well as Beijing. While an International Monetary Fund emergency loan signed in July provided temporary relief, there are doubts about Pakistan’s willingness to comply with the loan conditions.
Despite these challenges, the upcoming elections in all four countries, including Pakistan, do not have a single uniting theme. However, incumbent leaders currently seem more likely than not to retain power, setting the stage for potential continuity or changes in the region’s political dynamics.
From Bangladesh to India
In early January, 2024, Bangladesh is set to hold elections, which are expected to return incumbent Prime Minister Sheikh Hasina to power. Opposition parties, including growing Islamist groups, may find themselves further marginalised from the formal political system. While widespread protests are anticipated, it is likely that Hasina will maintain a firm grip on power, including control over the security forces.
Despite facing criticisms, including allegations of widespread corruption, Bangladesh has emerged as an emerging middle power in the region. Sustained economic growth over the years has elevated its per capita GDP above India’s, making it an attractive economic partner for Australia.
As the elections unfold, Australia will keenly observe the outcomes and navigate the region’s evolving political complexities. The results in Pakistan will significantly impact the country’s domestic and foreign policies, which in turn could influence the dynamics between India and China, given their interests in the region. Meanwhile, in Bangladesh, Australia will likely explore opportunities to enhance economic cooperation and further diplomatic ties.
Last but not least, India, the regional giant, will hold national elections between April and May 2024. The current government under Prime Minister Narendra Modi faces growing criticism for its treatment of minorities, leading to backlashes and protests from various groups. While the Modi government’s majority in parliament may face a significant challenge, no clear national opposition leader has emerged, and Modi is expected to hold on to power. Australia recognizes India’s importance as a crucial Indo-Pacific partner and seeks to deepen economic ties, given its massive population and economy.
Australia’s interests in these South Asian countries differ significantly, but a common thread lies in the importance of political stability for economic prosperity. India offers a vital partnership as Australia looks to diversify its economy away from China, and Bangladesh presents opportunities for regional cooperation. Additionally, even smaller nations like the Maldives hold considerable strategic importance for Australia as a key player in the Indian Ocean.
Furthermore, Australia’s home to fast-growing diasporas from India, Pakistan, and Bangladesh, among other South Asian nations, makes the domestic concerns and controversies of the region increasingly relevant in Australian politics.
Why Bangladesh’s political landscape holding importance to Australia?
Australia and Bangladesh share a historically significant relationship, rooted in Australia’s early recognition of Bangladesh as an independent nation in 1972. Despite initial limited engagement, the two countries have gradually strengthened their ties, recognizing Bangladesh’s transformation from an aid-dependent nation to an influential player in the Indo-Pacific region.
Australia’s pivotal role in acknowledging Bangladesh’s independence is underscored by Radio Australia’s broadcasting of the declaration of Bangladesh’s freedom, which brought the world’s attention to the newly liberated nation. While Australia has provided considerable aid and support for Bangladesh’s reconstruction, it was only recently that a comprehensive relationship between Canberra and Dhaka began to take shape.
Recently, Bangladesh’s impressive economic growth, averaging around six percent annually for two decades, has caught the attention of the international community. The country’s recent financial assistance to countries like Sri Lanka, the Maldives, and Sudan further strengthens its position as an increasingly influential regional state with the potential to be a significant player in the Indo-Pacific. This rise from poverty-stricken conditions to a dynamic regional actor has garnered Australia’s attention, prompting a shift in its approach towards Bangladesh.
Over the past five years, Australia has responded proactively to Bangladesh’s emergence as a key player in the region. Both countries are making vibrant efforts to enhance economic and political engagement. The signing of the Trade and Investment Framework Arrangement (TIFA) on 15 September 2020 marked a significant step in formalizing their economic relationship. Additionally, high-level engagements, such as repeated telephone calls between Marise Payne, the Australian Foreign Minister and Bangladeshi counterpart Dr. A. K. Abdul Momen, and a meeting between Australian Prime Minister Scott Morrison and Bangladeshi Premier Sheikh Hasina during COP26 in Glasgow, exemplify the changing nature of the ties between Dhaka and Canberra.
The TIFA has opened doors to a flourishing trade relationship between Dhaka and Canberra. Over the past decade, bilateral trade has grown a staggering 600 percent, reaching US$2.6 billion last year. The main drivers of this trade boom are ready-made garments (RMG), agriculture, food, and education services. Australia’s proximity to Bangladesh and its reputation as a reliable partner make it an enticing export destination and investment source for Dhaka. As the 32nd-largest trade partner of Australia, Bangladesh aspires to move into the top 20 in the next decade, potentially doubling the trade volume to $5 billion.
The trade relation also in talks
While Australia has over $1.3 trillion worth of investments abroad, its investments in Bangladesh have been relatively low, standing at $845 million until June 2021. Most of these investments have been in the gas and petroleum sectors. However, there are other priority sectors in Bangladesh that demand investment, including textiles, manufacturing, energy, and education. Notably, Australia, as the world’s largest liquid natural gas exporter in 2020, has yet to fully capitalize on Bangladesh’s growing demand for energy.
Australia’s strategic shift away from traditional markets in East Asia, partly due to its geopolitical tensions with China, presents an opportunity for Bangladesh to feature prominently in Australia’s new strategy as an entry point to South Asian markets. Bangladesh’s booming economy, large and young urban population, and growing middle class make it an attractive market for Australian exporters and investors.
While the economic ties between Dhaka and Canberra have strengthened, uncertainties remain on the horizon. The rise of China as a dominant global player, the shifting dynamics of American leadership, and the ongoing challenges posed by the pandemic all pose risks that could affect the trajectory of this thriving relationship.
Jeremy Bruer, the Australian high commissioner to Bangladesh, aptly responded to the prognosis for future relations, stating that “the future is golden.” The recent Department of Foreign Affairs and Trade (DFAT) annual report further emphasizes the need to strengthen ties with key partners in the North-East Indian Ocean region, including Bangladesh, as part of Australia’s Indo-Pacific strategy.
For Australia, building economic, security, and defense ties with Bangladesh, an emerging middle power, is crucial to complement relationships with larger regional powers. As growth slows in East and Southeast Asia, Australia must diversify its Indo-Pacific engagements, and a comprehensive partnership with Bangladesh, with its thriving economy and international outlook, could prove prudent for Canberra.
On the other hand, Bangladesh understands the importance of attracting new investment and diversifying its economy beyond the ready-made garments (RMG) sector and remittances. As it seeks investment, energy resources, and skilled labor, partnering with established regional powers like Australia could drive Bangladesh’s economic growth in the post-LDC period.