Engineer M. Hossain
Fellow of the Institution of Engineers, Bangladesh
The Moheshkhali-Matarbari Integrated Infrastructure Development Initiative (MIDI) project, a strategic cornerstone of Japan’s Free and Open Indo-Pacific (FOIP) vision, is a pivotal undertaking and a transformative force. It holds the potential to reshape Bangladesh’s economic landscape, inspiring hope and optimism for the future. By uniting nations across the Indian and Pacific Oceans, it becomes a beacon of ‘international public goods,’ fostering the region’s free and open maritime order.
Under the leadership of Prime Minister Sheikh Hasina, Bangladesh established a comprehensive partnership with Japan in 2014, launching the Bay of Bengal Industrial Growth Belt (BIG-B). This partnership is a testament to Bangladesh’s immense scale and ambitious nature in terms of economic development plans. The MIDI project, a crucial component of this extensive initiative, is not just a project but a transformative force that is set to shape the country’s economic future significantly, promising unprecedented growth and prosperity.
The Japan International Cooperation Agency (JICA) has been involved with the MIDI project since its inception. The project spans approximately 20,400 acres (82,555,871 square meters) in the Matarbari and Dhalghata unions of Moheshkhali Upazila, located in Cox’s Bazar district.
MIDI’s Vision 2041 is a comprehensive economic hub centered on trade and investment. Its meticulous planning covers all essential aspects, from a Deep-Sea Port and Logistics Hub to a Manufacturing Hub and a Power Generation and Energy Hub. This comprehensive approach, backed by sound policies and governance, seeks to attract substantial investments and reassure stakeholders about the project’s potential impact.
Furthermore, MIDI intends to attract diverse investments, including foreign direct investment (FDI), by securing funding from the Government of Bangladesh, development finance institutions, the private sector, and international investors.
The private sector and international investors play a pivotal role in the success of the MIDI project. Their involvement is not just about financial sustainability but also about bringing expertise and innovation. This collaborative effort ensures the project’s financial viability and makes MIDI a transformative force for Bangladesh’s economic growth. The private sector’s expertise in project management and innovation, coupled with the financial resources of international investors, will be instrumental in successfully implementing the MIDI project. Their involvement will be transparent and subject to rigorous oversight to ensure the project’s success and the protection of stakeholders’ interests. This oversight will include regular audits, public reporting, and adherence to international project management and investment best practices.
By 2041, the success of MIDI’s vision can be evaluated against several strategic objectives. These include enhancing export-import (EXIM) trade and connectivity, improving energy security, increasing value in Bangladesh, generating employment, advancing infrastructure development, and significantly contributing to the national economy. The MIDI project, focusing on trade and investment, is expected to dramatically boost Bangladesh’s GDP, accounting for at least 6% of the country’s GDP by 2041. This substantial contribution to the national economy underscores the project’s significance and potential benefits, making it a key driver of Bangladesh’s economic growth and development. The Vision 2041 of the project sets ambitious but achievable goals for its impact on Bangladesh’s economy and development, providing a clear and confident roadmap for its future success.
The MIDI project has the potential to transform Moheshkhali Island into a thriving center for trade and investment in southern Bangladesh. This transformation will bring economic growth and potential benefits to the local community, including job opportunities, improved infrastructure, and enhanced living standards. The promise of this upliftment should instill a sense of shared prosperity and commitment to the project’s success among all stakeholders.
The first pillar of the MIDI is to establish a deep-sea port and logistics hub, a crucial step in addressing Bangladesh’s trade and logistics challenges. This is essential for Bangladesh to enhance its export competitiveness and manage its high dependency on imported goods. The World Bank notes that Bangladesh ranks lower on the Logistics Competitiveness Index than Cambodia, India, the Philippines, and Vietnam. They estimate that a 26% reduction in logistics costs could enhance exports by 19%.
Bangladesh’s economic lifeline, Chittagong Port, is the largest EXIM port, handling about 95% of the country’s maritime trade. This trade encounters significant challenges from capacity limits and inefficiencies. The seaport can only handle a limited size and number of vessels. Bulk cargo often undergoes lighterage at Kutubdia Island, resulting in higher costs (30-40%) and delays (1.5-2 weeks) as goods are transferred to smaller feeder vessels at ports like Singapore, Colombo, or Krishnapatnam.
Matarbari Port is being developed to address these challenges by becoming the primary port in Bangladesh for large vessels, with a depth of over 16 meters. It will alleviate congestion at Chittagong Port by providing better handling facilities and significantly improving bulk cargo management for the Chittagong-Cox’s Bazar region. Additionally, Matarbari will enhance logistics with commodity-specific warehousing and offer strategic connectivity for Northeast India and Bhutan, with projected shipping cost savings of 25-35%.
By 2041, the Matarbari Port, a key component of the MIDI project, aims to handle a significant portion of Bangladesh’s bulk and breakbulk traffic, establishing itself as a vital regional port. This underscores the project’s strategic planning and potential impact on the region’s economic landscape, making their involvement necessary. The project’s impact will be felt in Bangladesh and the broader region, contributing to developing a free and open maritime order.
The second pillar of MIDI is the Manufacturing Hub. Due to its proximity to a deep-sea port, MIDI benefits from a 25-35% reduction in shipping costs for bulk and containerized goods, which leads to significant time savings for export-import (EXIM) industries. Furthermore, MIDI provides over 10 GW of power generation capacity and access to LNG, coal, and oil feedstocks. It also offers 8,400 acres across seven economic zones for large-scale industries.
MIDI faces several challenges, including its distance from key markets like Dhaka, which affects its competitiveness in consumption-driven sectors such as fast-moving consumer goods (FMCG). Additionally, a shortage of skilled labor hinders competitiveness in industries like readymade garments (RMG), pharmaceuticals, and leather. However, the project’s strategic planning and significant investments in human resource development are being implemented to address these issues. These investments include training programs, partnerships with educational institutions, and initiatives to attract and retain skilled workers. This commitment to overcoming these challenges and ensuring the project’s success should reassure stakeholders about the project’s viability and potential.
MIDI’s manufacturing strategy aims to establish itself as an EXIM manufacturing hub. It will focus on bulk and material industries while supporting Bangladesh’s import needs for raw materials, such as steel and cement. Its proximity to the port is expected to attract these sectors and reduce logistics costs, thereby decreasing the country’s reliance on imports and the overall production costs of bulk goods.
Furthermore, MIDI can capture value in petrochemicals, polymers, and edible oils that rely on imports. By integrating various stages of production, MIDI could provide a domestic alternative that reduces costs by up to 25% compared to imports, positively impacting GDP.
In the long term, MIDI anticipates attracting export-oriented manufacturing in consumer durables and pharmaceuticals, leveraging a robust industrial ecosystem to attract skilled workers. The manufacturing hub plans to utilize the designated 8,400 acres for key sectors and logistics, potentially attracting USD 18-20 billion in investments over the next 18-20 years. By 2041, it could contribute around 10% to Bangladesh’s manufacturing sector, paving the way for significant economic growth.
The third pillar of the MIDI initiative focuses on Power Generation and the Energy Hub, addressing Bangladesh’s critical energy security concerns. The country relies heavily on imports of LNG, coal, and oil, which are anticipated to increase due to recent fuel shortages and price volatility impacting the manufacturing sector. MIDI aims to strategically enhance energy security by utilizing its deep-sea port and available land for fuel imports and providing energy storage solutions.
By 2041, MIDI is projected to manage approximately 2,000 million cubic feet per day (mmcfd) of LNG import and regasification, 2 million tons per annum (MTPA) of LPG imports, and 15-20 MTPA of petroleum, oil, and lubricants (POL) imports. The power generation capacity is expected to be revised to 10-15 GW, with around 1.8 GW from coal, 8-13 GW from LNG, and approximately 200 MW from solar, fulfilling 20-30% of Bangladesh’s power demand.
The Power Division has already acquired substantial land for this project, and the 1.2 GW Ultra-Super Critical Coal-Fired Power Plant Phase 1 has been in commercial operation since 2024. In the future, MIDI’s power hub can also support clean energy technologies such as carbon capture and utilization (CCU) and hydrogen co-firing. Furthermore, the 8-10 MTPA refining capacity at MIDI is projected to meet around 35% of the country’s refined product demand by 2041, a significant milestone that will reduce the country’s dependence on expensive imports.
The interconnection of MIDI’s three pillars offers a substantial opportunity for economic development. It aligns with Bangladesh’s Vision 2041 and fosters sustainability and resilience within its energy landscape.
The successful execution of the MIDI has the potential to directly contribute approximately USD 70 to USD 75 billion to Bangladesh’s Gross Domestic Product (GDP), with an overall impact projected to reach around USD 150 billion by 2041. This initiative is expected to create approximately 150,000 direct jobs and generate up to 2.5 million total jobs, representing over 5.5% of the national labor force.
Investment in MIDI is estimated to total USD 60 to 65 billion over the next two decades, which includes an anticipated influx of USD 5 billion in foreign direct investment. Furthermore, the initiative is expected to yield annual savings of USD 17 billion in the balance of payments through import substitution and enhanced local value addition, alongside projected yearly exports of USD 7 to 8 billion.
MIDI is poised to become a vital hub for trade and investment, particularly in the manufacturing and power generation sectors. It aims to develop an urban ecosystem sustaining approximately 500,000 to 700,000 residents while improving regional connectivity to neighboring areas, notably Northeast India and Bhutan. Ultimately, MIDI aspires to enhance the position of the Matarbari-Moheshkhali region as a key participant within the frameworks of Bay of Bengal cooperation, including initiatives such as BIMSTEC and the Free and Open Indo-Pacific (FOIP) strategy.
MIDI has the potential to enhance Bangladesh’s socio-economic landscape significantly. Over the past fifteen years, the country has made notable progress under Sheikh Hasina’s leadership. However, there are signs that the current government, led by Dr. Yunus, does not fully recognize Hasina’s contributions to this progress. There are concerns that it may be attempting to claim credit for her development efforts. Furthermore, the current government has been observed to create divisions within society and prioritize propaganda over substantial action in development projects, which has led to public unrest.
While the MIDI project is reported to be progressing well and is on track, the government must ensure cooperation among all stakeholders to facilitate national development. The implementation of MIDI has the potential to contribute positively to the advancement of Bangladesh and its population.