Indo-Bangladesh ties: Political compulsions prevent Hasina from making the right moves

The huge bilateral trade gap was the focus of Gujral-Hasina talksCricket may have hogged the lime light, but there was another reason why many eyes in South Asia were on Dhaka in mid-January. In a historical first, the prime ministers of India, Pakistan and Bangladesh met, deliberated and talked of trade, investment and joint ventures instead of Kashmir, ULFA or Farakka. But given the history of their relationship over the past three decades, these are easier said than done.However, the prime ministers, I.K Gujral, Nawaz Sharif and Sheikh Hasina Wajed, did, in a sense, take forward the agenda they had cleared at the South Asian Association for Regional Cooperation (SAARC) summit in Male last year for the creation of a South Asian Free Trade Area (SAFTA) by the year 2001. Nineteen months into her term, Hasina finds it difficult to counter the charge of her principal detractor, Bangladesh Nationalist Party (BNP) president and former prime minister Khaleda Zia, that she is unable to reduce the huge trade gap with India. Contrasted against Rs 280 crore in exports, Bangladesh imported Indian goods worth Rs 4,800 crore last year. Given the asymmetry in size and product range of the two countries, there is actually little she can do about it.In his speech at the summit, Gujral sought to deflect some of this criticism by offering to remove trade barriers, especially quantitative restrictions, on agreed imports from Bangladesh. He also offered to reduce tariffs on over 500 items, though these steps in themselves are not of much significance. Admits Bangladesh Finance Minister S.A.M.S. Kibrea: "Even if India removes taxes on everything, the trade gap cannot be bridged." That is because the basket of exportable items Bangladesh offers to India is too small, comprising at most five items and that too for a very "Bengali" market across the border (hilsa fish, jamdani saris, jute, some chemicals and cotton readymades).According to the Confederation of Indian Industry Deputy Director-General S. Sen, "The Bangladeshis are now realising that the solution lies in tie ups in infrastructure and value-added services." Today, there is just one industrial project involving trans-border sharing of resources, the Rs 944 crore cement plant coming up at Chatak in Sylhet district.What excites India most is the tapping of Bangladesh's vast natural gas resources. Says FICCI Secretary-General Amit Mitra: "If Hasina is willing to sell us a part of its huge reserve of gas, Bangladesh could end up as a hot investment destination.".preferred-source-banner{ margin-top: 10px; margin-bottom:10px;} In India's scheme of things, gas-based power could offset the northern grid's shortage as well as result in spin-offs for its industrially backward North-east. But gas is a politically sensitive issue in Bangladesh. Despite international pressure, Hasina has been unwilling to discuss hydrocarbon prospecting because of fear of domestic political opposition. Even then, Indian goodwill is crucial to Hasina because her first year saw foreign investment drop by 15 per cent.India, on the other hand, needs Bangladeshi gas and access to the port of Chittagong, which could trigger economic growth in the backward north-eastern states, which in turn would check insurgency. After the Ganga waters accord, optimists in the Gujral Government hoped that Bangladesh would quickly grant five transit routes that India wanted for improving communication links with its north-eastern region. In fact, the idea had met with favour at the Indo-Bangla Joint Economic Commission meet in March last year, but political opposition at home has forced Hasina to postpone a decision. "This is a question that concerns our sovereignty," declares BNP Secretary Abdul Mannan Bhuniyan. Ironically, it was the BNP regime which originally okayed the suggestion, but, typically, once out of power, opposed it.India views this benignly as posturing, typical of democratic politics, but Gujral made an attempt to mollify Khaleda and former military ruler H.M. Ershad, both of whom he met during his Dhaka sojourn. "We view them as representatives of the Bangladeshi people, whatever their present capacities," said Foreign Secretary K. Raghunath.Sharif went to the summit without a specific pro-business agenda (see box) and his bilateral meetings with Gujral were low-key. Raghunath admitted at a press conference that at their meetings, the Indian and Pakistani leaders and officials talked about Kashmir and other contentious issues. The last word on this could well be the Indian general elections which could send Gujral out of office. As Farooq Sobhan, Bangladesh's former foreign secretary, who now heads the country's foreign investment board, puts it, "Two years of good work may be undone if the next government in Delhi decides to put the clock back." The unstated fears are that a BJP victory could spell trouble for Hasina. "It's as if all this is doomed," commented a top FICCI delegate. He sounds pessimistic, but may not be entirely off the mark.Published By: AtMigration Published On: Feb 2, 1998--- ENDS ---

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Indo-Bangladesh ties: Political compulsions prevent Hasina from making the right moves

Infrastructure tie-ups and sharing of natural resources could boost economic ties but political compulsions prevent Hasina from making the right moves.

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