A transmission line between India and Bangladesh marks a meaningful first step towards cooperation in South Asia.
This is fast work, indeed, in the South Asian context, where the shadow of suspicion among neighbours is deep and long. Should we say it’s also a good omen for the future? Last January, India offered Bangladesh financial help for a number of infrastructure projects, one of which concerned the supply of electricity to its power-starved eastern neighbour. Nine months later, Bangladesh is all set to build a 40-km transmission line on its territory to make this transfer possible. By 2012, hopefully, electricity will start flowing.
It’s surely a breakthrough, and, while both governments deserve to be applauded for playing the good neighbour, real credit must go to the Asian Development Bank (ADB). It found willing parties and, true to its mission, stepped in quickly to bring the two together. In so doing, ADB performed a splendid catalytic role that could mean a lot for our difficult, knotty sub-region. It certainly raises hopes.
Early this month, ADB approved a $100 million soft loan to Bangladesh, under which a 400 KV transmission line will be laid from the Indian border to Bheramara, Kushtia, where a 600 Mw direct current substation will also be built. Bangladesh will chip in with the rest of the total project cost of $158.8 million. India will build, own, operate, and maintain, at its own cost, an 85 km line on its side of the border to connect with the sub-station in Baharampur, West Bengal. While 250 Mw is to be supplied from India’s public sector generation, ADB will help procure 250 Mw more from private electricity traders. The Manila-based development bank will also help draw up the necessary interconnection agreements and build up Bangladesh’s electricity trading capability.
Of course, the project is of great importance to Bangladesh, where more than half its 156 million people lack electricity and losses to the economy due to power cuts run into almost $1 billion a year. But of greater interest to us is the fact that it marks, at last, a meaningful first step towards regional cooperation in South Asia. ADB has described it as a “window of opportunity” and hopes this breakthrough would eventually make way for broader cooperation across South Asia, involving, for example, the tremendous hydropower potential of Nepal and Bhutan. The bank is a strong proponent of regional cooperation under its Strategy 2020 and has done a study on the scope for energy trade among the South Asian countries.
India’s offer of a $1 billion credit line to Bangladesh, formally signed last August, provides a reasonable basis for such hope. Electricity grid interconnection is only one of 14 projects covered by that agreement for which the credit line would be used. Others involve roads, railways, bridges, and inland navigation that have important implications for Bangladesh’s economic development. It is in India’s interest to see that these projects succeed.
However, it may not be in India’s interest to assume too high or direct a profile as it goes into the job. Not everyone in Bangladesh, or in the region, will appreciate India’s motive or Sheikh Hasina’s economic compulsions. It is, therefore, wise for India, as it certainly is for Bangladesh, to involve ADB as the catalyst even in bilateral projects. ADB has the authority, neutrality and trustworthiness to get things done even when neighbours aren’t always in their best possible relations.
Giving projects a regional twist, by involving ADB, is a better way to reduce the scope for political opposition and get many more things done than would be possible in normal circumstances. For example, transit routes to India’s northeast through Bangladesh, or to Nepal and Bhutan through India, would invite less criticism or suspicion if set against a regional context; and nobody can be a better catalyst for regional cooperation than ADB. Certainly not the South Asian Association for Regional Cooperation, or SAARC, on its own. It’s just too politicised and fractious.
Equally, for ADB, making more bilateral matches would be the safest and surest way to fulfil its regional ambitions in South Asia. The formula of total approach that has worked wonderfully for it in the Mekong sub-region and is now gaining momentum in Central Asia, won’t work in South Asia, since divisions among its nations are still far too many. While these divisions might not allow nations to agree on a broader, concrete, multinational framework upfront, they could be persuaded to work in twos or threes on smaller collaborative initiatives that would bring immediate neighbourly benefits.
Areas for such limited collaborations shouldn’t be difficult to pick, and once they succeed and the results are there for everyone to see, doubts and suspicions will begin to melt, first in the immediate neighbourhood, then, gradually, across the region. Examples on the ground are always a better motivator than talks and promises, however loud and strong.
