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Volume 3 Issue 2 | February 2010



Original Forum Editorial

The Next Step--Rehman Sobhan
Rising Tides-Sadiq Ahmed
A Precipitate Outcome-- Reaz Rahman

The Key Issue --Nazrul Islam


Photo Feature: Celestial Devotion--Jashim Salam
A Bold New Beginning-- Farooq Sobhan
Running the Numbers--K.A.S. Murshid
A Fistful of Takas-Jyoti Rahman
One Year On--Khalid Hasan
Nationalist, Anti-Nationalist or Beyond Nationalist?-- Shamima Nasreen
Ideas That Change the World-- Pial Islam


Forum Home


A Bold New Beginning


Farooq Sobhan offers his assessment of what was achieved in New Delhi

Prime Minister Sheikh Hasina's visit to India from January 10-13 this year has opened up a whole new vista, not only simply in terms of Bangladesh's bilateral relations with India, but in terms of Bangladesh becoming a middle income country by 2021.

If Bangladesh is to move from an annual growth rate of 6 percent to 8 or 9 percent, it must make rapid progress in the integration of its economy with its immediate neighbours, India, Nepal and Bhutan. It must accelerate the pace of sub-regional cooperation and then move forward to further expand and then ultimately integrate its economy with both South and South East Asia.

The visit should give a fresh impetus to promoting stronger ties in the region, most notably with China, the other member states of Saarc and all the member states of Asean, including Myanmar, the only other neighbour, with whom Bangladesh shares a border.

The key to Bangladesh's growth and development is the need for connectivity. Indeed, the key to regional economic cooperation has always been connectivity. Therefore, I believe the visit by the prime minister has been a very major and important step forward.

The three security agreements signed by both countries is without question a major step forward in building a relationship of mutual trust, replacing the years of finger pointing and trading of accusations, charges and counter-charges. The three agreements clearly reflect the security concerns shared by the two neighbours and constitute a major breakthrough in building a new relationship based on mutual confidence and cooperation in an area which has been given the highest priority by both countries, counter-terrorism.

This has caused a major shift in Indian thinking and attitude to Bangladesh. For the first time in many years, Bangladesh has taken the most rational, practical and realistic approach in terms of addressing not only its own security concerns, but that of its neighbour.

No one can deny the fact that both countries have been the victims of acts of terrorism or that both countries remain highly vulnerable to further attacks. The prime minister herself has been the victim of a major terrorist attack against her on August 21, 2004, which resulted in the death of 23 persons including Ivy Rahman, the wife of the president of Bangladesh. Sheikh Hasina, better than any one else in the country, understands the necessity to combat terrorism; she understands that in order for Bangladesh to do so effectively, the cooperation of India is of vital importance.

However, what is important is not just the signing of the five agreements or the 50 paragraph joint communiqué, but the need to show concrete results in several areas and to do so, as soon as possible. In some cases, results can be shown in 3 to 6 months, while in other cases it might take 6 to 12 months. However, within twelve months of the visit, tangible progress should be visible in all areas.

As such, both countries should agree to meet on a regular basis, both at the level of senior officials and also at the ministerial level. It is indeed noteworthy, that follow-up visits have already begun. Three such visits have already taken place and several more visits on both sides are in the offing. In order, however, to give the entire process of follow up action a major push, the two prime ministers should appoint special envoys, with the rank and status of a cabinet minister.

The special envoys will coordinate and monitor the work of the various meetings of senior officials, several working groups may be established, covering each of the key subjects covered in the joint communiqué. These working groups should meet on a regular basis. The special envoys on each side can monitor the progress of work and meet each other several times a month, to ensure progress and to be able to show that Indo-Bangladesh relations are indeed bearing fruit. They should keep their respective prime ministers fully briefed. When necessary the two prime ministers can pick up the phone and talk to each other, a practice which is followed in many parts of the world.

It has already been announced that there will be talks on the Teesta and other trans-boundary rivers in the coming weeks. It will provide a major boost to the bilateral relationship if an agreement on the Teesta can be concluded in the near future.

It is equally important that all outstanding issues arising out of the 1974 Land Boundary Agreement are taken up at the earliest possible, including the exchange of enclaves and providing unhindered access to Dahagram and Angarpota, a subject which was discussed during the visit. In this connection it is important that the subject matter of border management is taken up urgently so that the many incidents involving the loss of lives on the border are avoided.

There are a host of other issues which warrant urgent attention. The demarcation of the maritime boundary between India and Bangladesh falls within this category. While the negotiations may be long drawn out, is it not possible for the two sides to reach an understanding which would allow the exploration work on the so-called disputed blocks to continue? There are many precedents that can be followed which might facilitate an interim agreement.

One of the major sticking points in the bilateral relationship has been the substantial trade imbalance. Last year India's exports to Bangladesh were approximately $3 billion, against Bangladesh's exports of $280 million. The zero tariff quota of eight million pieces of garments extended by India could not be fully utilised because of NTBs, sales taxes and countervailing duties. India should make a conscious effort to try and ensure that, during the calendar year 2010, exports from Bangladesh to India should be doubled compared to last year and if possible cross $700 million. This will be possible if India removes all para-tariff and non-tariff barriers and also persuades the North-Eastern states to extend unhindered access to Bangladesh products. Tripura has set a good example by withdrawing or reducing sales taxes. It is the consumer that benefits from this.

Sheikh Hasina's visit it is hoped will result in an expansion of trade between the two countries, in particular the trade between Bangladesh and the North-East. What is required is an expansion and improvement of the existing land customs stations on both sides as well as the opening of new customs facilities. Access roads need to be improved and upgraded as well as storage facilities. It is encouraging that in the case of one of the major sticking points, mutual acceptance of standards and certification, there has been some progress. The process of mutual recognition of certificates should be speeded up.

The Bangladesh prime minister in her speech to CII, FICCI and Assocham, the three apex chambers in India, welcomed Indian investments and joint ventures. Bangladesh's strategic location, its duty free access to the European Union and many other countries, its proximity to the North-Eastern states of India, to Asean and to China, should make Bangladesh a very attractive destination for Indian investments. This was certainly the case following the India-Sri Lanka FTA, which resulted in a sizeable increase in Indian investments in Sri Lanka.

A wide range of subjects were covered during the visit. Five areas of cooperation deserve special mention:

Access Routes for Nepal and Bhutan
It has often been argued by the "non-cooperationists" and so-called "multi-lateralists" in Bangladesh that the Indo-Bangladesh imbalance ought to be redressed by enhanced connectivity with Nepal and Bhutan. India has agreed to facilitate improved connectivity through its territory to Bangladesh, Nepal and Bhutan for fast-tracking their trade. It is important to operationalise the access routes to Nepal and Bhutan from Bangladesh and vice versa, as soon as possible. It is equally important that both Nepal and Bhutan are allowed unhindered access to Chalna and Chittagong. This connectivity is without question the most important step in the move to sub-regional economic integration.

Implementation of Grid Connectivity
One of the urgent requirements of Bangladesh at the moment is to meet its shortfall in the energy sector. Hence the importance of the MOU on cooperation in the power sector between Bangladesh and India. While power generation domestically remains a thrust area on the agenda of the Bangladesh government , the import of 250MW of power from India will supplement the government's drive to close the gap between supply and demand in the power sector as quickly as possible.

Grid connectivity between the two countries can be established in a relatively short period of time, preferably before the onset of summer, when demand in Bangladesh will register a substantial increase. There may be scope for export of power in larger quantities given the fact that peak demand in West Bengal and in the northern areas of Bangladesh do not coincide. It is also hoped that Bangladesh would be able to import electricity from Bhutan in the near future; once there is grid connectivity this becomes a relatively simple process. There is also considerable scope for power purchase agreements between Tripura and Bangladesh, as well as some of the other states in the North-East bordering Bangladesh, such as Assam and Meghalaya.

Movement on Dredging of Rivers
Bangladesh is a riverine, low-lying delta, criss-crossed by as many as 230 rivers, big and small. Life, livelihoods and the eco-system in Bangladesh are dependent on this water system. Many of these arteries of life have silted up due to frequent floods and silt-carrying Himalayan rivers, affecting agriculture, fisheries, inland navigability and transportation of goods and people. Some rivers have been polluted by way of human ignorance and indifference.

Dredging these rivers of Bangladesh is a national development priority. The government of Bangladesh plans to conduct capital dredging of 53 of the most affected waterways and dying rivers as well as remove waste from the rivers surrounding the capital city of Dhaka. This exercise will require a major investment in dredgers and ancillary equipment. India's willingness to provide the dredgers and to do so in the shortest possible time, will provide a major boost to the government's dredging program.

Utilisation of the $1 Billion Credit Line
India has offered Bangladesh a credit line of one billion US dollars. It is the largest sum of money India has ever offered as a soft loan to any country. It is meant for overhauling and improving the entire railway infrastructure in Bangladesh, including purchase of passenger coaches. Bangladesh will be in a position to refurbish a major neglected and dilapidated sector of transportation.

The early utilisation of this credit line will serve the dual purpose of improving the country's transportation system, thus facilitating the movement of both goods and people, not simply within Bangladesh but through Bangladesh to South East Asia and China, to Nepal and Bhutan and eventually to West Asia and Europe.

The early utilisation of the credit line can also serve as an important demonstration of the new partnership between India and Bangladesh. The prudent and effective utilisation of this substantial credit line, which has an extremely low interest rate of 1.5 percent with a repayment period of 20 years, can go a long way in improving the investment climate in the country, for both local investment as well as foreign investors.

Improvement of Land Customs Stations
It is absolutely essential to address the issue of improving the land customs stations on both sides of the Indo-Bangladesh border in respect of access routes, storage facilities, standardisation, etc. This would not only facilitate movement of goods and people between Bangladesh and India, but also help prevent smuggling of small arms and curb cross-border terrorist movement. This would also expedite and expand Bangladesh's exports to India, thereby narrowing the huge trade imbalance between the two asymmetric neighbours. As such, it is important for both the countries to operationalise physically and digitally compatible land customs stations as soon as possible.


To demonstrate that the visit by the prime minister was not just undertaken as a goodwill visit, tangible results need to be seen in the next three to six month period. Moreover, for India to show its seriousness in resolving the outstanding bilateral issues, the Indian prime minister should make a visit to Bangladesh before the end of the year. In fact, if possible, the Indian prime minister might consider visiting Bangladesh during the first half of this year.

There should be agreement that following the exchange of what has officially been described as a "state visit," the two prime ministers should meet once every three or four months for a half-day working visit. Sheikh Hasina while traveling West can always stop-over for a couple of hours for talks with Dr.Manmohan Singh. Similarly, the Indian prime minister can stop over in Dhaka on his way to North-East India. After all, Assam is his constituency. In the case of the EU, the heads of government meet frequently without any pomp and ceremony. We need to do the same in our region, and India and Bangladesh should set an example.

It is abundantly evident that concrete results cannot be produced overnight and it will be a major challenge for the bureaucracies in the two countries to speed up the implementation process. Our government also needs to have in place an effective communication strategy to both educate and familiarise the general public of the importance of the signed agreements and the broad-based understanding reflected in the joint communiqué on a wide range of issues.

What the visit has demonstrated without a shadow of a doubt is, that there is now at long last, the political will and determination on both sides to see the relationship move forward. The benefits for Bangladesh through increased trade and investment, through improved connectivity not only with India, but with Nepal, Bhutan, China and the Asean countries, will be immense.

If we do manage to get Bangladesh-India relations moving in the right direction, it is quite possible for the country to achieve a GDP growth of 8 to 9 percent in the next two to three years, speed up poverty alleviation, and achieve the MDG goals. Apart from having increased trade and investment with India, Bangladesh is ideally situated to move forward and integrate itself economically with India, China, Bhutan, Nepal and the Asean countries.

It is important that at this critical juncture the country makes a conscious effort to focus on the best way to accelerate growth. The critics of the visit tend to look to the past and say you cannot trust India, while the essence of the prime minister's visit was to look to the future and ensure that Bangladesh was an integral part of the rapid changes taking place in the region; that as India, China and Asean move towards a single market that Bangladesh was a part and parcel of this and that we leveraged our strategic location to the full.

It is time that a national consensus was forged in support of better relations with India. This will require debate and discussion within the country, but will also require increased people to people contacts between India and Bangladesh. The key is to close that gap to clear any negative perceptions people may have about agreements with Bangladesh's largest neighbour and regional power.

One of the most effective tools in achieving this is for both government and opposition to have a constructive debate on the visit in the one place where elected politicians can openly address such issues -- the parliament. The sooner this happens the better.

Farooq Sobhan is Chairman, Bangladesh Enterprise Institute, and a former Foreign Secretary.



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