'Jica remains committed to Bangladesh’s development despite global crisis'

Jica's Executive Senior Vice President Miyazaki Katsura visited Bangladesh recently. During her trip, she sat down with The Business Standard for an exclusive interview on 1 July at Jica'sDhaka office. The interview was conducted jointly by TBS Senior Staff Correspondents Saifuddin Saif and Kamran Siddiqui.

How do you view Bangladesh's development journey and potential? How has Jica's relationship with Bangladesh evolved over time?

After Bangladesh's independence in 1971, Jica began its cooperation. In 1973, we started dispatching volunteers, initially in the agriculture sector. Since then, we've expanded into agriculture, health, education, environment, transport, energy, and more. 

Over the past 50 years, Bangladesh's development has been remarkable, and we are pleased to have contributed. The upcoming graduation from LDC status marks a symbolic milestone. We aim to support not just economic growth, but also sustainable and inclusive development. Our cooperation is guided by three pillars: 1. Industrial development, including private sector growth and infrastructure in transport and energy. 2. Urban development and environmental improvement. 3. Inclusive development, which covers governance, education, health, and disaster risk reduction. 

Despite global crises—such as in Ukraine, Gaza, and rising tensions in the Middle East—our commitment to Bangladesh remains strong.

Jica has supported major infrastructure projects like the Dhaka Metro Rail and Matarbari Deep Sea Port. What impacts have these had? Any other notable projects?

Infrastructure like the MRT isn't just about transport, it changes lives. Easier access to jobs, schools, and hospitals significantly benefits daily life and promotes women's empowerment. For example, the MRT Line 6 includes women-only coaches and female station staff to ensure safety; an important step against harassment. 

Yesterday, I visited the Matarbari coal-fired power plant, a 1,200 MW facility. Reliable electricity is crucial, not just for industry, but for improving everyday life. However, infrastructure alone isn't enough. Maintenance is vital, which is why we also provide technical cooperation to develop human resources. 

This holistic approach – financial and technical – is what we call "one-set cooperation." Other impactful projects include: Matarbari Deep Sea Port, Bangladesh's first deep seaport. Its 18.5-meter depth allows large vessels to dock.

And then, Hazrat Shahjalal Airport Terminal-3. We're awaiting the start of commercial operations. Jamuna Railway Bridge, another critical infrastructure connecting regions.

Can you share how Jica is contributing to human capital development nationwide?

Health and education have always been core areas for us. In healthcare, we've worked on maternal and child health, non-communicable diseases, and nursing education. Just today, I visited Shaheed Suhrawardy Medical College and Hospital, where we're improving nursing education. 

In education, we've supported curriculum and material development in science and mathematics for over 20 years. Around 40 million students use textbooks developed under Jicaprojects. We've also trained local government staff across 495 Upazilas and 12 city corporations. 

Over 560 Bangladeshi officials have received scholarships to study in Japan. Other sectors we support include judiciary reform, agricultural technology, food safety, river and waste management. Our "Clean Dhaka" project, for example, improved waste collection efficiency from 40% to over 80%.

We also support capacity building initiatives for ICT engineers in general.

Jica contributed significantly to supporting the development of special economic zones like BSEZ. How do you think these zones will contribute to Bangladesh's economic diversification?

Our support for economic zones like BSEZ stems from the need for diversification. Moving beyond garments to more advanced industries boosts economic resilience. BSEZ encourages FDI and enhances productivity. Already, eight companies have committed to operating there, with four from Japan. This aligns with our goal of industrial diversification and job creation.

Why is the interest rate on Jica loans continuously increasing? The interest rate on Jica loans for construction projects has now reached 2%, significantly higher than before. Similarly, interest rate on consultancy loans has risen to 0.65%, up from 0.40% just a few months ago. 

We revise this interest rate every six months, not just in Bangladesh, but globally. This policy is applied across all countries. The Japanese government makes decisions based on Jica's procurement rates. We need to procure financial resources, and for that, a certain interest rate is imposed. This rate is then reflected in our lending rates. 

So, our procurement and lending rates are interconnected. As we understand, due to inflation and other factors in the international financial market, interest rates are rising. That increase needs to be reflected in Jica's lending rates as well. However, I still believe that Jica's lending rates are very concessional. They are much lower than those offered by many other development partners.

Why is there criticism that Jica consultants favour Japanese firms? Is the selection process fair and open?

That's a misunderstanding. We have a programme called "Step", which ties projects to Japanese firms, but Bangladesh, being an LDC, is excluded from this. All Jica projects in Bangladesh are untied, meaning companies from any country can compete. We do not restrict bids to Japanese firms. Many Bangladeshi and foreign companies participate and win contracts.

Why are Jica's feasibility studies proposing unusually high project costs? For instance, in the Chattogram–Cox's Bazar Highway Improvement Project, the Planning Commission had to reduce Jica's proposed cost by around Tk4,000 crore. A similar pattern is being observed in the Matarbari Access Road Project, which is now under government review due to inflated cost estimates.

This is a good opportunity to clarify this issue, as we often hear concerns about the high costs associated with Jica-supported projects. Regarding the Chattogram–Cox's Bazar Highway Improvement Project, that estimate was based on a very preliminary assessment. The Road and Highways Department is currently conducting the detailed design, and a more accurate cost estimate will emerge from that process. Therefore, any reduction made at this stage is tentative and may not reflect actual project requirements.

Reducing costs prematurely can be problematic, especially when prices are rising. The final cost should be based on detailed design and, ultimately, on the bidding outcome. 

Regarding the Matarbari Access Road Project, I understand that there were concerns initially, especially after the change in government. However, following a review, the authorities recognised that the proposed cost was appropriate. The project covers a 27-kilometer stretch, with 11-kilometer consisting of bridges, which naturally increases costs. Additionally, the geological conditions in the Moheshkhali–Matarbari area are quite challenging – it's a low-lying coastal zone affected by high tides – so high construction standards are essential. 

Moreover, the construction schedule for the Matarbari Deep Sea Port is very tight, and the access road must be completed quickly to align with that timeline. Accelerated construction also contributes to higher costs.