Philip Bowring: Neighborly talk in South Asia
FRIDAY, MARCH 24, 2006
After all, if India cannot have economically productive relations with its eastern neighbor there is scant chance of the current rapprochement with Pakistan developing into region-wide cooperation.
India has no fundamental problem with Bangladesh. There is no divisive territorial issue, as there is between India and Pakistan over Kashmir, and both India and Bangladesh share secular constitutions and democratic institutions. Yet for years relations have been bedeviled by mutual suspicions and allegations.
The visit was particularly significant in that Prime Minister Khaleda Zia of the Bangladesh National Party has always been viewed in Delhi as more hostile to India than the opposition leader, former Prime Minister Sheik Hasina. With elections due in early 2007, India might have waited to see if there were a change of government to Hasina's more amenable Awami League. But India's new-found self-confidence and desire to promote trade and business ties appear to have overcome Delhi's traditional disdain for its neighbor in general and the BNP in particular.
In the past, India has been particularly at fault in planting suggestions that Bangladesh, which it helped create, is now a failed state, a hotbed of Islamic fundamentalism, a refuge for the rebellious minorities causing the violence in India's troubled northeastern states, and a source of large-scale illegal migration into India.
The reality is that Islamist violence in Bangladesh has been entirely contained within the country and can be viewed as part of a culture of political violence of which secular parties have sometimes been guilty. There is scant evidence that it has been exported to India or anywhere else. Bangladesh is better governed that several of the neighboring Indian states, such as Bihar, and illegal movement of goods and people across a densely populated and very porous border region is a mutual responsibility.
Bangladeshi attitudes toward India have been characterized by a self-defeating defensiveness. It has blocked the development of transit routes from West Bengal to India's northeast and impeded cooperation in the development of gas reserves for which the natural market is in India.
A change of perception on both sides was originally signaled by the announcement 18 months ago by India's Tata group of plans to build a $2.5 billion power station, fertilizer plant and steel works in Bangladesh fueled by local gas. This would be by far the largest single private investment in Bangladesh.
The project still faces many hurdles set by corrupt Bangladeshi bureaucrats and politicians, particularly over the pricing of gas. But there is reasonable chance that it will happen, particularly if India can offer some trade concessions to its neighbor in a way that would reduce the colossal trade imbalance in its favor. India could also provide Bangladesh with improved access to Nepal, which is separated from Bangladesh by a narrow band of Indian territory, in return for road and river transport cooperation. (At present, much trade between the two goes via Singapore.) India also wants Bangladesh to stop dragging its feet over a pipeline to take gas from Myanmar to West Bengal.
At the very least, the Khaleda visit was dominated not by talk of political issues and terrorism but by trade and economic ones involving India's trade minister, Kamal Nath and Bangladesh's veteran finance minister, Saifur Rahman, both pragmatic, business-friendly ministers.
In practical terms, nothing much may happen - particularly on gas pricing - until after the Bangladesh election. But Indian business is now looking seriously at the investment potential of its near neighbor. And Bangladesh is recognizing that its economy must grow beyond textiles and garments. These industries have been remarkably successful and, against most predictions, benefited from the abolition of the quota protection it enjoyed in international markets until last year. But it is a narrow export base for a country of 130 million people.