Wednesday, March 15, 2006

Bangladesh PM visits India

I have read a very good article in The Daily Star, one of my favoutite newspapers across the world. The article sets out an agenda for Prime Minister Khaleda Jia to be tabled in India. It mentions also that the Prime Minister, who's known for her anti-India stance for years, should bargain judiciously to gain the maximum possible benefit out of the visit.

Let me try out a few possible responses of Indian govt. in these topics of the agenda.

Common rivers
Needs a permenent solution rather than problem at each dam. The South Asian chaotic democracies need some strict solutions to this problem, like what was done in Indus Water Treaty with Pakistan. The treaty stands firm till date. For India-Bangladesh case, the distribution can be East-West as well. Barrages can be built only on Western rivers (Ganges, Teesta) and not on Eastern ones. The Eastern rivers might be allocated entirely to Bangladesh for consumptive purpose, as those river areas (North-East India) does not depend on river water for agriculture. The generated hydroelectricity can be shared with Bangladesh with a share in investment. Bangladesh also needs to recognize India as the upper-riparian State and get ready to consider shortage of power as an obstacle of Indian services industry.

Land Borders
Exchange of land and corridors should take place in phases and in a transparent way. The fate of these 300,000 people, who are locked in enclaves inside other country, has to be decided by these countries in a sympathetic way. The land-people swapping should be done with the consent of the people involved.

Immigration
I think Indian govt should start looking at this issue more seriously. Bangladesh produces surplus man-power in Technological sector, where India has a shortage. A lot of the technocrats of Bangladesh goes to West for jobs. India can allow some of them to work in India as we are in shortage of technocrats. It will be a win-win solution for India-Bangladesh.

Regional Energy Grid
This comes under Common Rivers problem The sharing of electricity from surplus-potential electricity regions (Nepal, Bhutan, North-East India) to energy hungry regions (West Bengal, Bangladesh and Jharkhand) can reduce Indian dependency on coal to produce electricity. However, the investments should be shared between the countries.

Joint Iron/Fertilizer plants
I don't think this will be a necessary item to discuss once Tatas are dealing with it. A good deal with Tatas can solve these problems for ever.

Trade deficit
This is a topic where I think Bangladesh is unfair with India. Bangladesh has similar Trade deficits with Japan, China and even Pakistan, but nobody raises finger at them. Japan returns a lot in terms of aids, but China does not. The Trade deficit with India is now gone down to second place below China. Besides, Bangladeshi exports to India is growing at 80% (89.3mn to 144mn in 2005) compared to only 25% (45mn to 56mn) with China. Hence, Bangladesh should understand that politicizing business is not good for business. The Indian exports are now being substituted by Chinese ones, according to the Daily Star report. Hence, till date, the reason of trade deficit with India was mainly lack of investment and lack of industrialization. A sincere effort to attract investment should solve this issue.

The points those India will be interested to put in Bangladesh table are the followings :
1) Investment opportunity 2) Transit ( the most important) 3) Use of Bangladesh ports.

Investment opportunity
Indian govt. might ask for preferential investment opportunity of Indian companies into Bangladesh, as it has similar agreement with Srilanka. This can open a floodgate of investments in a capital-hungry country.

Transit
Already discussed in my previous posts, I think Bangladesh govt. should throw away it's non-progressive look out and embrace the transit route as a geographical reality. Tagging this issue with other one's will hamper the prospect of Bangladesh's earning potential from this specific issue. It will also block future investments in infrastructure, such as land ports, roads and rail-line. The below picture(Kolkata-Agartala) shows what could be the positive effect of the transit if allowed. The transit should have a reciprocity clause, India should allow Bangladesh the same favour in case of it's trade with Nepal and Bhutan.


Use of Bangladesh ports
This is a different issue than the above, as Bangladesh never officially rejected this one. Bangladesh shows the lack of infrastructure in Chittagong port to be the reason of not allowing India to use it. But, at the same time, they are interested to become proxy-port of Nepal and Bhutan. I think, Bangladesh should go for equity in foreign policy and offer use of Chittagong port to India. India should invest in port infrastructure of Chittagong to facilitate trade though that.

Conclusion
As historically seen, India seems to have reservation in dealing with BNP govt in Bangladesh. They prefer Awami league for all major deals with Bangladesh. The situation is more complex, because a positive India deal is can give BNP a potential breakthrough before the election, which India never wants. Same way, any sacrifice from Indian point of view might hamper the position of Congress in Assam and West Bengal.

Besides, of late, a shift of strategy from Indian policymakers' has been noticed. They want to take on hostile countries in a multilateral meeting (SAARC), rather than bilateral ones. This potentially reduces the risk of direct confrontation and bitterness in relations. Hence, I am not expecting a miracle from Indian govt. on any of these issues, we have to wait longer to discover a friendly neighbour in the East.

Another similar article can be found in The Hindu.

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