Sunday, June 20, 2021

Bangladesh: The Growth Engine South Asia Requires to Tango with India for Shared Prosperity

by Gp Capt Anupam Banerjee (Retd) @unapom

The year 2021 happens to be a very important year in the history of India’s relationship with Bangladesh.

India’s role in the Bangladesh liberation war and securing its nationhood from the erstwhile Pakistan, is extremely well documented and there is reason to celebrate. However, this year calls for a reflection on how this relationship has panned out over the past 50 years, and whether the complete potential of this relationship has been realised and harnessed.

India is currently the sixth largest economy in the world, and the economic and social progress of Bangladesh in recent years is an indicator of its national will to lose the tag of a “poor nation”, and emerge as a country which is well on its way to take its place among the top 25 economies of the world in the near future. As per data collated in 2019 by the International Monetary Fund, Bangladesh was the sixth fastest-growing economy globally. 

‘Fortune’ magazine named Bangladesh as “The Economic Miracle” of 2019. Bangladesh was rated by NASDAQ as the 3rd fastest-growing economy globally in 2020, whilst the entire world was underperforming as a result of the COVID-19 pandemic. The 2021 report of the US-based International

Institute of Finance confirmed that Bangladesh will continue to lead the list of the world’s fastest-growing economies, while a United Nations Economic report ranked Bangladesh number one in the South Asia region.

Amidst this backdrop, Indian Prime Minister – Narendra Modi’s visit to Dhaka last month, was of immense significance with regard to the future ties between both countries. Modi was the chief guest at the 50th anniversary commemoration of the Bangladesh liberation war on March 26, which also coincided with the birth centenary celebrations of Bangladesh’s founding father – ‘Bangabandhu’ Sheikh Mujibur Rahman, father of Sheikh Hasina, Prime Minister of Bangladesh.

Sheikh Hasina’s ascent to power in 2008, marked a turnaround in the relationship between both countries, which was previously stunted as a result of the BNP government’s largely Anti-India stance, for the sake of its domestic political base. During the visit, both leaders described the current times as the ‘Golden Era’ of India-Bangladesh relations. Modi’s decision to make Bangladesh his first port of call post the pandemic, was a potent proclamation of the importance India’s eastern neighbour holds in her heart.

On the other hand, India is an extremely valued partner by Bangladesh. Bangladesh is India’s largest trade partner in South Asia, with notable trade surplus to India. Many major Indian companies consider Bangladesh to be their largest foreign market outside India for specific product categories. There are a few thorny issues like the Teesta water sharing debacle, balance of the trade deficit, illegal migration into India, and the political rhetoric in both the countries in order to please their domestic audience – that need to be smoothened out. Diplomats are constantly working to arrive at quick settlements, in order to fast track improvement in India-Bangladesh relations. In recent years, great progress has been made with regard to resolving some other issues like land enclaves, maritime boundaries etc, which serve as a beacon of hope towards further improving ties between both countries.

Bangladesh and India, both have the option to grow on their own, or grow symbiotically through mutual cooperation. Both nations have robust institutions and structures that are working towards improving economic, social and human life indices. Further, both nations are going to be the major drivers of the Asian economy over the next few decades. The choice to grow mutually however, is distinctively more advantageous.

Towards this goal, connectivity will remain the cornerstone of the future relationship among both nations. A recent World Bank report suggested that seamless transport connectivity between India and Bangladesh has the potential to increase national income by as much as 17% in Bangladesh and 8% in India. The report brings out that strengthening the Bangladesh-Bhutan-India-Nepal motor vehicles agreement could transform regional transportation in eastern part of South Asia, thus bringing significant economic benefits to both Bangladesh and India. The report also suggests measures like connecting local markets to regional corridors and removing logistics bottlenecks in export-oriented value chains to usher in growth.

Expanding the land connectivity between both countries opens up an alternate route for India’s goods to reach South East Asian countries. Furthermore, the time and cost incurred to transport material between North East India and the rest of the country, can be significantly reduced if Indian trucks and goods carriers are given permission to transit through Bangladesh. The cost of exporting goods from Tripura, Mizoram, Manipur, Nagaland etc. can be reduced drastically if given access to the Chittagong port of Bangladesh, thus benefiting both the countries.

Cooperation in certain other fields with tremendous potential also remained sub optimal so far. Bangladesh recently launched its first satellite. Though India is one of the frontrunners in the ‘Space Race’, Bangladesh chose to launch its satellite from the USA. In the future, India can form a space consortium, where countries like Bangladesh, Bhutan, Nepal, Sri Lanka etc. can benefit from India’s considerable expertise in this sector, much akin to the functioning of the European Space Agency. Similar progress can be made in fields like Medicare, Public Health and various other areas of Science and Technology.

The ‘China Factor’ might continue to remain a bit of a roadblock, as Bangladesh would probably prefer to balance out both the big players – India & China. Bangladesh gets its maximum FDI from China, whilst it is surrounded by India on all sides, sharing one of the longest land borders between any two countries in the world. India needs to view Bangladesh’s approach pragmatically and move ahead.

India’s External Affairs Minister S Jaishankar, during his recent visit to Bangladesh said, that India and Bangladesh have the potential to completely transform the Geo-Economics of the region. India’s recent engagement with Bangladesh is indicative of a shift in India’s foreign policy, as it increasingly focuses its attention eastward. With the troubled neighbourhood of Northern and Western borders India can be justifiably hopeful for prosperity to flow in from the eastern borders.

MUST READ

Emirates Group Security and GMR aviation academy inks MoU

by Staff Correspondent Emirates Group Security (EGS) and GMR Aviation Academy (GMRAA), two leading aviation training providers based in Dubai and India respectively, today signed...
Delhi
haze
30.1 ° C
33.5 °
30.1 °
74 %
4.1kmh
40 %
Sun
34 °
Mon
41 °
Tue
42 °
Wed
43 °
Thu
43 °