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Resetting Relationship

September 5, 2011

Everyone is looking forward to Indian premier Dr. Manmohan Singh’s high profile visit to Bangladesh in September 6-7. Some are eager to see a new beginning while few start to raise eyebrows.

There’s much to expect from Mr. Manmohan Singh’s forthcoming visit. Transit, duty free access of Bangladeshi goods, and sharing of Teesta water are key issues that draw most attention from media.

Though late but New Delhi seems ready to press the reset button in refreshing its relationship with Bangladesh.

South Asia Analysis Group’s Guest columnist Rajeev Sharma has best explained the reason in his recent column

The importance of good Indo-Bangladesh relations and their positive effect on the South Asian region was recently underscored by US Secretary of State Hillary Clinton during her recent India visit. Urging India to step up its leadership role in the region, she specifically stated that India “has a great commitment to improving relations with Bangladesh, and that is important because regional solutions will be necessary on energy shortages, water-sharing, and the fight against terrorists.” This statement could not have come at a more opportune time.

Transit: Beyond Jargon

In the question of transit, Bangladeshi society is divided into two school of thoughts: pro-transit and anti-transit. A right wing academic belongs to anti-transit school of thought seriously questions the term ‘transit’ and insists that it should rather be called ‘corridor’ as no third party involves in the treaty. He even went further saying the best this transit deal could get us only $15 million a year.
Transit/corridor does not mean we are giving away our trade advantage of North-East India, this point was often made by former BNP ministers,rather it means we are entering into the good book of Delhi. Later, this transit case will be used to gain more market access to India, not just to North-East (NE), to attract more Indian Investment in manufacturing sector and to allow India to transfer technologies related to light engineering and manufacturing sector etc. The professor was more informed about the size of population of Bhutan. How many people do live in the NE? How much do they earn? Rapid development in NE means increase in purchasing power of the NE. Any construction boom in NE will result in rise in demand for Bangladeshi cement, steel etc. But I agree with him on one point that the North-South dimension should be given more importance.

India is also working on other routes too. There are reports that India is working on developing Sittawe port in Myanmar to facilitate its trade between NE and rest of India through Myanmar.

The Recession Cushion and Containing the Silent Demographic Invasion

It would be highly appreciable if 61 Bangladeshi items ,which include garment items that Bangladesh can competitively produce, get duty free access to Indian market. Right now Bangladesh can export 10 million garment items duty freely to India. Garment Exporters have long been arguing to increase the quota limit or to allow duty free access to existing Bangladeshi garment items.

For Bangladesh, a substantial increase in the market access to India will act as a cushion in the time of global recession and will help it to find a new destination for its RMG items that are mostly destined to USA and EU.

I think Bangladesh should see India as one of the tech-transfer sources. In future, India will play a major role in terms of transferring technology in labor-intensive manufacturing sector.

However, the consideration to give duty free access of some Bangladeshi garment items to India has been criticized by the Apparel Exporters Promotion Council. But market access of Bangladeshi items should be viewed from the security viewpoint. India has been reproaching Bangladesh for a long time for a silent demographic invasion in its neighboring states, more particularly in Assam. Recent result of the State election in Assam proved that these accusations have substance. For the first time, Banladeshi immigrants supported party All India United Democratic Front (AIUDF) is the main opposition party in Assam. People belong to non-Assamese dialect are increasing at an alarming rate in Assam. Most of them migrated to Assam due to economic reasons. BBC Bengali Service carried a special report on the result of Assam State election and highlighted this issue in detail.

India should provide more market access of Bangladeshi manufacturing items to its market to contain this silent invasion. Apart from that, this will help to create a new breed of Pro-Indian entrepreneur class.

Something Missing

India is likely to provide more credits apart from the $1 billion credit line to improve the transit infrastructure. But one key area, defense sector, is not getting the due importance. Every single civilian dollar should be equally matched with defence dollar. Or else civilian ties will not sustain. Let’s hope policy makers and bureaucrats of both the countries understand this.

Hopefully, Indian think-tank Institute for Defence Studies & Analyses has stressed on Indo-Bangladesh Defence cooperation as reflected on recommendation no. 13 of its Task Force report titled “India-Bangladesh Relations : Towards Convergence”.

Recently, the Indian army chief visited Bangladesh. Both sides should build on that visit. The two sides can enhance cooperation in the military sphere, including in search and rescue, joint patrolling of piracy infested areas of the Bay of Bengal, capacity building, joint exercises etc. Defence cooperation will build mutual confidence.

I’ve heard of one incident where a BOP of BDR was attacked by NASAKA in1992. As the tension escalated along the Bangladesh-Myanmar border, Bangladesh called for Indian assistance in line with a friendship defence pact. India responded promptly and deployed its troops along the Indo- Myanmar border. This move defused the tension and thwarted any full-scale war. Unfortunately, that pact was not renewed.

I personally think two countries should sign a defense treaty, which should include collaborative defence research , joint production of military hardware, air defense system,UAV, hovercraft etc. apart from safeguarding common interests and setting up a formal channel of Intel cooperation . Indian military experts and instructors should train and groom our future military leaders at Bangladesh Military Academy (BMA). In addition, India should not raise concern over Bangladesh’s procurement of fighter aircraft, corvette, air-defence system from Russia or EU countries.

A Journey of Thousand Miles…

I ignored the water sharing aspect of this visit as I have little interest in the issue and as you find lots of discussion on the topic in the media.

Transit or corridor whatever the international trade jargon is, the whole process should be viewed as a tool to settle down dispute and to narrow the differences between the two countries. Cost of not having a transit agreement with India is huge. We will not only loose to secure a fair share of the economic growth of India, we will also hamper our market diversification project that ensures sustainability of our export growth in the time of global recession.

Genuine grievances of Bangladesh should be addressed with due importance. Large trade deficit remains a major Bangladeshi concern. Besides market access of Bangladeshi goods to India, more Indian investment in export-oriented manufacturing sector could narrow this imbalance.

It was co-operation on coal that marked the beginning of the EU, for South Asia it may be energy, textile and food security that will float the dream of South Asian Union, which still remains a distant dream. There is an old Chinese saying– ‘A journey of thousand miles begins with one small step.’ Whatever the fee of transit/corridor is we must go for it. We have to make sure that we have a stake at the economy of one of World’s top 3 economies by 2050.

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