Bridge to Bangla

Bangladesh Prime Minister Sheikh Hasina’s visit to India in January this year was considered a strategic gamechanger. Her party,the Awami League,had been given a firm mandate to govern in the general election in 2008; and it was expected to be better disposed towards India than its main political rival,the Bangladesh Nationalist Party of Khaleda Zia. The pacts signed at that time focused on electricity generation and joint counter-terrorism strategy,but discussions — and agreement — were wide ranging,including especially questions of border demarcation,transit rights,and trade. Yet,in the time since, it has appeared that New Delhi has slackened off somewhat. Sheikh Hasina cannot be expected to spend too much political capital on a relationship that appears obviously one-way.

This is why Finance Minister Pranab Mukherjee’s visit to Dhaka on Saturday could work out to be more important than the length of time he spent there — a few short hours — would indicate. He was there to oversee the signing of a landmark loan: the billion-dollar credit line that India’s Exim Bank has given Bangladesh,agreed on during Sheikh Hasina’s visit. Interestingly,much of it will focus on upgrading Bangladesh’s trade infrastructure — dredging rivers,building bridges,buying locomotives and buses. This is useful; as the larger point is that the integration of Bangladesh’s economy with India’s must proceed apace. This will not be easy. First,regardless of India’s position on freer trade,too many items still exist on the “exemption” list,raising non-tariff barriers against Bangladeshi imports into India. Mukherjee will have a major role to play here; keeping domestic special interests from sabotaging the freeing of trade in their particular sector. A first step has been made here,in sending a team from the Bureau of Indian Standards to Bangladesh to help harmonise standards,so that one major bureaucratic hurdle is cleared as quickly as possible. Second,keeping the momentum going will require effort,as much of the integration is based around large infrastructure commitments,and thus will have quite a lengthy gestation period. In the interim,small steps towards keeping up the forward pressure will need to be taken regularly — which is,again,where the non-tariff barriers come in.India can afford to be magnanimous in any deals with Bangladesh. Indeed,it cannot afford to not be magnanimous. The Bangladesh PM will need to continually explain to a domestic audience that their big neighbour is not looking to push them around. India’s PM,who has made better relations along India’s border a priority,will recognise that speed and visible political and bureaucratic will are essential.