Trying to be good neighbours

economic integration with its neighbour. One big problem has been Indias worry that Bangladesh harbours anti-Indian

terrorists. The year-old government of Sheikh Hasina Wajed and her Awami League has started to dismantle this obstacle.

This month it arrested and handed over to India Arabinda Rajkhowa,the chairman of the United Liberation Front of Asom (ULFA),a militant group fighting for an independent homeland for ethnic Assamese in Indias north-east state of Assam. In the past two decades at least 10,000 people have died in the insurgency. Bangladesh had already handed over a number of other ULFA leaders in November.

For India the arrests are a big step towards defeating ULFA,which it has long accused of waging a proxy war in its north-eastern states on behalf of Pakistans and Bangladeshs intelligence services. India hopes that Bangladesh will hand over other insurgents,as well as suspected members of Lashkar-e-Taiba,the Pakistan-based group accused of the terrorist attacks in Mumbai in November 2008.

Next month Sheikh Hasina is to make a state visit to India. Officials on both sides are confident that it will yield agreements on security co-operation,on Bangladeshs purchase of electricity from India and on the creationvirtually from scratchof transport links across a common 4,100km (2,500-mile) border,the worlds fifth-longest. Economic statistics belie the two countries shared history and geography. Bangladeshs biggest trading partner is China. India is not even in the top ten of foreign investors in Bangladesh.

The benefits of co-operation could be huge. Full economic integration with India could raise Bangladeshs average rate of economic growth from 6 per cent to 8 per cent,estimates Farooq Sobhan,the president of the Bangladesh Enterprise Institute,a Dhaka think-tank. Now,says Mr Sobhan,for the first time,there is agreement that unresolved problems should not stand in the way of things that can be done.

The biggest difficulty for the Awami League may be to explain its new policy of engaging India to voters,in a country with a strong tradition of anti-Indian sentiment. But like Indias ruling Congress party,with which it has long-standing friendly ties,the League has a thumping majority and four years until an election.

The opposition Bangladesh Nationalist Party (BNP),whose Look East policy is now being overturned,is in a mess. This week its leader,Khaleda Zia,appointed her son,Tarique Rahman,for many the symbol of all that was wrong with the BNPs last period of kleptocratic,vindictive rule,as the partys deputy chairman. The other big political force,the army,is back in the barracks after its intervention and abortive interregnum in 2007-08.

For the League,re-election-something no elected government has ever achieved in Bangladesh-depends on faster poverty-reduction,reducing power shortages and maintaining law and order. If these aims could be met,a young electoratenearly 80 per cent of people are under 40might even

tolerate better relations with India.

The Economist Newspaper Limited 2009