Prime Minister Manmohan Singh’s maiden foreign tour seven years ago was for a summit meeting of the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Co-operation (Bimstec) in Bangkok. That tour has a connection with his visit today to Bangladesh. This trip bids fair to become a game-changer for two ideas whose time hasn’t come yet: a larger Bay of Bengal grouping and South Asian regional integration which has only animated endless rounds of summitry.
India had sought to participate in regional groupings like Bimstec since the 1990s owing to the frustratingly slow progress over the South Asian Association For Regional Cooperation (Saarc), thanks to tensions between India and Pakistan. This necessitated a highly innovative bit of strategising that got over the sticky problem of including countries like Nepal while excluding Pakistan. Bimstec, thus, equalled Saarc minus Pakistan with Myanmar and Thailand thrown in for good measure!
But this Bay of Bengal grouping hardly made any progress. An important reason was the absence of connectivity, among other factors. Unless the various member countries were linked through road, rail, air and shipping services, freer trade would be sub-optimal. Connectivity meant providing landlocked Nepal with transit facilities to use the ports of Mongla and Chittagong in Bangladesh. Connectivity with Thailand entails establishing road, rail and other linkages traversing Bangladesh and Myanmar.
India will now have better access to its north-eastern states, where south-east Asia really begins. It has proposed to Myanmar that it would rebuild the Sittwe Port and make the Kaladan river navigable to provide alternative access into Mizoram and the north-east. Dr Singh’s visit is expected to result in a forward movement in all these aspects since Bangladesh has agreed to provide seamless connectivity between Nepal, Bhutan and India and to extend it to Myanmar and the other countries rimming the Bay of Bengal.
If all this can help Bimstec become a reality, a far bigger outcome of the visit is to ensure that south Asian integration, too, sees the light of day. To be sure, over the years India tried to get the neighbouring countries on board by accepting asymmetrical responsibilities in opening its market. As the dominant player, India hoped that through unilateral trade liberalisation they would acquire a greater stake in its prosperity. But this was in vain since politics cast a shadow on this effort to integrate the region.
The neighbours only deepened their resentment at India’s dominance. As if all of this weren’t enough, each one of Saarc members persistently registered massive trade deficits with India and they began to clamour for India to further open up its market. Until recently, the most vociferous demand for such a unilateral opening up of India’s market came from Bangladesh which registered a deficit of $1.5 billion in 2005-06, which widened to $3 billion in 2010-11 vis-a-vis India.
The big factor of change that made a difference to the strained bilateral relationship was the Awami League regime coming to power in Bangladesh in December 2008. There has been a flurry of high-level visits by Cabinet members of both governments since 2009. The high point was the visit of Bangladesh Prime Minister Sheikh Hasina in January 2010. The joint communiqué stated that the recent elections in both countries presented them with a “historic opportunity to write a new chapter in their relationship”.
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The prime ministers of both countries also underscored the role of Saarc in promoting regional co-operation and agreed to work together in making it a far more purposeful organisation oriented towards implementation. Interestingly, they also welcomed the various steps taken to strengthen regional co-operation under Bimstec. Bangladesh requested India to support its aspiration to host the Bimstec Secretariat in Dhaka. Getting Bangladesh on board clearly makes the Bay of Bengal grouping possible!
In this milieu, India has also made a difference in redressing Bangladesh’s sensitivities so that it acquires a greater stake in India’s rise as a global economic power and benefits from it. India has been accused of being miserly in its unilateral trade liberalisation measures. But given its determination to fix the problem with its neighbour, it is now ready to provide much greater market access for Bangladesh’s textiles such as readymade garments, in which the country has become a much bigger global player than India!
Getting it right with Bangladesh has also entailed making cross-border supply of power a reality. South Asia’s diverse topography lends itself to greater cross-border power trade, but political inhibitions have so far ensured that actual progress is less than the potential. If economic efficiency were the yardstick, Bangladesh should be trading in power with India. The least-cost short-term option is to import power from West Bengal, Meghalaya and Arunachal Pradesh, according to a study by Mahendra P Lama.
Getting it finally right also involves sharing rivers, as the lower riparian Bangladesh needs a guaranteed flow of water throughout the year. To ensure such a regular flow of the Ganga, both countries concluded a historic 30-year Ganges Water Treaty in 1996. A similar effort is needed to share water of the Teesta and other common rivers. It entails promoting greater border trade with the north-east and settling disputed patches of territory and other security-related matters on the long border that both countries share.
Clearly, building the long road from Bangladesh to Bimstec depends greatly on Dr Singh’s visit. Even as Pakistan still drags its feet on extending the most favoured nation treatment to India, south Asian regional integration is an idea whose time has come. Towards this end, India should provide greater market access for goods of other Saarc members so that they also benefit from its rise as a global economic power. All of this will contribute to greater flows of trade within south Asia so that intra-regional trade exceeds the current low levels of five per cent of total exports.