Bangladesh to benefit more from cooperation beyond trade and infrastructure connectivity

The Economic Times, March 20, 2021

By Bipul Chatterjee

Next week Prime Minister Narendra Modi will visit Bangladesh to take part in commemoration ceremonies of the 50th anniversary of its independence and the birth centenary of Bangabandu Sheikh Mujibur Rahman. His first foreign visit after the advent of the Covid-19 pandemic!

It is expected to give a further boost to infrastructure and other connectivity initiatives between the two neighbouring democracies. A number of memorandums of understanding on connectivity and related areas are expected to be signed, which should be looked as a stepping stone for taking this relationship to the next level.

Geography Matters

The location of Bangladesh in India’s Indo-Pacific construct resembles that of a butterfly. While the centre (the body of a butterfly) is Bangladesh, her wings are spread across a vast geography with Russia and Mauritius on one side and Japan and Australia on the other.

This shows the role that Bangladesh can and should play for a ‘free, open, secure and prosperous’ Indo-Pacific and benefits that it can get from it, being an immediate neighbour to a big economy. As Bangladesh has qualified to graduate out of its least-developed-country status in 2026, its geo-economic and geo-strategic status will improve in the emerging Indo-Pacific construct.

According to a recently published report by the World Bank Group (Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia), “seamless transport connectivity between India and Bangladesh has the potential to increase national income by as much as 17 per cent in Bangladesh … All districts in Bangladesh would benefit from integration, with the eastern districts enjoying larger gains in real income.”

This is exactly what the two governments are aiming for over the last few years, which has gained momentum with the commissioning of a number of infrastructure connectivity projects. The recently inaugurated bridge over the Feni River connecting Chattogram port and Sabroom district in Tripura is one such example.

Most importantly, these initiatives are not limited to enhancing road connectivity. They are encompassing all means of transportation including rail, air, inland waterways and coastal shipping.

Out of the six existing but defunct railway links, five have been revived and work is underway to operationalise the sixth one along with two new links. Air connectivity between Dhaka and Guwahati has been revived. In near future many other Bangladeshi cities such as Sylhet, Chattogram will get connected by air with smaller towns/cities in eastern and northeast India.

The scope of using river protocol routes, particularly for bulk goods, has been enhanced with the inclusion of new and extended port of calls. An agreement on coastal shipping has been inked so as to use Mongla and Chattogram ports for transporting Indian goods to Bangladesh and to Northeast India. Taken together, they will not only help Bangladesh to explore new sources of non-tax revenues but will also make it more resilient to adverse economic shocks.

They should be complemented with regulatory harmonisation including that in digital connectivity to further the ease of doing trade. This should be an important pillar of a comprehensive economic partnership agreement that Bangladesh and India are expected to finalise soon.

Beyond Trade

While bilateral trade between India and Bangladesh is steadily increasing, there should be more focus on investment and knowledge cooperation. India should encourage its private sector to invest more in Bangladeshi special economic zones. Other than strengthening our bilateral value chains, it will create a large number of semi-skilled employment, furthering the development of Bangladesh’s rural non-farm economy, particularly in sectors such as light engineering, pharmaceuticals, leather products.

Knowledge cooperation is another pillar, which requires specific attention. Over time India has developed a significant capacity to address issues and challenges in areas such as climate-smart agriculture, disaster management, renewable energy. Given the similarities of challenges that they have faced and are facing in these areas, there should be institutional cooperation including trilateral cooperation involving other development partners.

A Test Case for Prime Minister Modi

Bangladesh is a test case for Prime Minister Modi’s thinking on ‘Atmanirbhar Bharat’. This is because, far from an autarkic measure, it is about serving the world with goods and services with ‘zero defect, zero effect’. With an ever-increasing purchasing power, Bangladesh is rightly placed to get incremental benefits from this initiative.

Secondly, Bangladesh is one such neighbour where Prime Minister Modi’s philosophy about ‘Sabka Saath, Sabka Vikash, Sabka Vishwas’ will be tested on the ground. This is particularly so because it originates from the age-old Antyodaya philosophy of India and a stepping stone towards human-centric globalisation.

Therefore, on this auspicious occasion of the 50th anniversary of Bangladesh’s independence and Bangabandhu’s birth centenary, let there be a further momentum to our collective efforts for a ‘Sonar Bangla’. While we will remain independent republics separated by political boundaries, let us explore a new kind of confederation stitched by trade, investment and knowledge cooperation.

(The author is Executive Director, CUTS International, a global public policy think- and action-tank on trade, regulations and governance.)

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