Strategically Speaking
The economics and politics of transit
THE issue of transit to India has propped up again, this time with a renewed and very firm demand from India for allowing Indian goods and passenger transport ingress into, and egress out of Bangladesh, from and into Indian territory. The request has been lying with the Bangladesh government since mid-2007.
In this context, one ought to go back a bit into history to put the matter in perspective -- to address the issue more objectively, driven by the head rather than the heart -- and see if we can put it into purely economic terms.
The fact that both the countries were connected by road and rail link up to 1965 is well known. Rail links existed between the two countries prior to September 6, 1965, and were discontinued after the outbreak of the war between India and Pakistan. Three trains ran between the two countries, carrying goods and passengers -- East Bengal Express between Sealdah and Goalandu Ghat via Gede; East Bengal Mail between Sealdah and Partbatipur via Gede; and Barisal Express between Sealdah and Khulna via Petrapole.
There were three road links connecting India with Bangladesh. National Highway No. 35 connected Calcutta to Barisal and Bongaon to Dhaka. National Highway No. 35 connected Petrapole to Barisal, and National Highway No. 40 connected Siliguri and Guwahati to Chittagong and Dhaka via Comilla.
After 1971, both the countries had expressed political will to utilise the economic complementarities for mutual benefits. And in the spirit of mutual cooperation, Bangladesh had, in fact, agreed to accord "transit" facility through the signing of the Indo-Bangladesh Trade Agreement on March 28, 1972, and Bangladesh could, by the same token, use the facility for its own benefit.
Article V of the Agreement provided for "mutually beneficial arrangements for the use of their waterways, railways and roadways for commerce between the two countries and for passage of goods between two places in one country through the territory of the other." What is of significance is the Indian foreign trade minister's comment at the signing ceremony that Bangladesh's "railways and its roads can once again be used by India for the benefit of the Indian people on either side of Bangladesh. We, on our part, Excellency, would be only too happy to provide the necessary transit facilities to Nepal and our friends in Bangladesh."
Many in India perceived Bangladesh as an "economic bridge" between India's north-eastern states and the rest of the country. For India, it makes extremely good economic sense to be able to use a corridor to its northeastern states. It would spare them constructing a long and tortuous road through hostile territory, infested with insurgents of many hues. It had been estimated -- in the '90s -- that construction of new tracks would cost Rs. 2 crore per kilometre. It would cost many times more that amount now.
The 1972 agreement was for one year. A new trade agreement signed on October 4, 1980 had similar proviso for surface connectivity, but that the surface links, except by river routes, did not come about has to do with everything other than economics.
Why did the successive Bangladesh governments not provide the facility agreed upon? Even the Awami League government, which had in principal approved the proposal (June 1998) for the passage of goods between places in India via Bangladesh -- "provided they are conveyed by Bangladeshi carriers," had not provided this facility during its tenure. In fact, a committee headed by the then commerce minister Tofael Ahmed, to study all aspects of the proposal, had managed only to agree to further study the economic and strategic implications of allowing a corridor to India.
My impression was that it was merely to hedge the issue -- being aware of the very sensitive nature of the matter; the government was wary of taking a decision on an issue that might have been seen at home as providing special dispensation to India, when India did not deliver on some of its commitments.
Insofar as the economic return is concerned it, too, was an undetermined element in the transit discourse. There was no gainsaying what would be the economic benefits for Bangladesh, and what opportunity costs that we might have to count by allowing India the transit facility. One is not certain whether the government or any non-government think-tank has as yet indulged in a serious cost-benefit analysis of the proposal and get a clear approximation of our gains from it.
While it is not for this government to take a policy decision on the transit issue -- and it has made the position clear -- it must be treated more dispassionately. For us, geography is not a curse but a boon. It has lent us strategic significance regionally, the significance of which cannot be lost on our policy planners. We must bring this advantage to work for gaining strategic dividends. It must also be kept in mind that multi-modal connections have a great advantage for the South Asian countries, which we cannot afford overlook
While it is immoral to deal with issues on a quid pro quo manner -- when it relates to one's national interest all other considerations come second -- one's neighbours would go by the same motivation. Also, there are serious security issues that are associated with the matter that must be brought into consideration in any future negotiation, and if there are economic dividends that we can derive that are positively proportional to the investment, so much the better. This must be made amply clear to India.
Transit has never been a forgotten issue, at least not for India. But I guess it has become a rather embarrassing matter for Bangladesh -- not knowing perhaps how to convey to India that there are other compelling factors that influence policies. It is futile to compare a similar situation obtaining in other parts of the world with this. It is would be erroneous to see such issues in merely economic terms -- in any case economics do not drive politics in South Asia, in fact the reverse is true.
Had that not been so, Bangladesh would have had the benefit of access through a piece of Indian territory the size of a football field into its enclaves of Dahagram and Angorpota on a permanent basis -- the issue of sharing Ganges water would have been earnestly addressed long before 1996, and the much publicised promised sale of half a million tons of rice to Bangladesh following "Sidr" would have been fulfilled without Bangladesh having to suffer the shenanigans of some of the Indian rice traders.
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