Political opposition notwithstanding, a Bangla Corridor would bolster trade for both countries
THE official proposal to revive the road and river trade routes between India and Bangladesh may be a routine administrative exercise that hasn't exactly set the Padma on fire. But economically, it could well be the best news for the region since 1947.
As economic imperatives prevail over entrenched political distrust and tension, across-the-board support for immediate activating of the trade routes is growing in both countries. The plan, if ratified by the Bangladesh Parliament, will bring about five new transit points between the neighbours. The Indo-Bangladesh Economic Commission has suggested four in West Bengal—New Jalpaiguri, Coochbehar, Ghojadanga and Bongaon—and one in Meghalaya, Barsora near Dawki.
There are still sizable pockets of blinkered opposition to the idea, more in Bangladesh where the fear of economic competition haunts a section of businessmen. They argue that Bangladesh exported goods worth only Rs 287 crore to India in 1996 against imports worth Rs 3,509 crore. Further opening up of trade can only help the bigger country at the expense of its smaller neighbour. This economic argument is bolstered by the anti-India rhetoric regularly spewed by groups like the Bangladesh Nationalist Party (BNP), which has admitted to sheltering Indian insurgents in Bangladesh. Its leaders grimly project that opening up the road and river routes can only be a prelude to India swallowing up Bangladesh, never mind how. India may also use the trade routes to bring the rebellious North-east under its control, it feels.
If the BNP would much rather its country ended up as an isolationist Albania, only poorer, exporters in India too are no less wary. Sources in the Chemical and Allied Products Export Council of India (CAPEXIL) ask: "Will Bangladesh really change its attitude? It was the BNP which had signed the SAPTA agreement which required SAARC countries to offer mutually beneficial trade concessions and terms. Better trade routes are only a part of the package. Yet, the BNP is now reneging on its commitments. Purchases from India have fallen since the BNP lost power to the Awami League." Official sources in Meghalaya corroborate: "Until recently, Bangladesh has imported coal at $63 a tonne rather than buy from us at $45. These days we do not even approach them for business." Anyway, the size of exports to Bangladesh, at just over Rs 3,500 crore, is insignificant in the context of India's total exports, economists point out.
But economic benefits of the proposal far outweigh the negatives. For one, while India can send its goods to the North-east along road and river routes, Bangladesh too can sell its goods to those states, something that it has wanted for long. For another, the arrangement presupposes the development/expansion of two major ports in the region, Calcutta and Chittagong. In fact, Calcutta could well regain much of the eastern hinterland it lost after partition. Chittagong Chamber of Commerce Vice President Kamaluddin Ahmed told the press at the 1997 Indo-Bangladesh Trade Meet: "To handle goods sent for the north-eastern states from Calcutta port, our Chittagong port must be expanded and developed. Once that is done, there is no reason why it cannot earn millions of dollars by way of port charges, revenues and other channels."
For landlocked Nepal and Bhutan too, the opening up of Chittagong port will be good news. River traffic between the rest of India and parts of Assam, Tripura or Bangladesh along the Brahmaputra and other rivers will increase, resulting in precious savings in fuel costs and travel time. Tea industry circles in Calcutta are confident that exports from Assam can gain in time and money if moved through Bangladesh, commanding better prices in the international market. The jinxed Rs 3,600-crore Assam gas cracker project may get a fresh lease of life, if naphtha imported for the plant is routed from Calcutta to Assam through Chittagong port. The existing link between the rest of India and the Northeast is a 20-km wide chicken-neck corridor at Siliguri, which runs for a total of 2,200 km from Calcutta or north Bengal to Agartala or Mizoram. Cut through Bangladesh and the road shrinks to 350 km.
Preliminary estimates made by Bangladeshi economists suggest an increase in national earnings of over Rs 3,000 crore by way of freight charges, royalties, etc. As for the north-eastern states, Mizoram Chief Minister Lalthanhawla says: "Trade with Myanmar, even after opening up only a couple of points, has risen to over Rs 500 crore. The rise in trade with Bangladesh could be larger." The state government hopes to channel, through Bangladesh, exports of several commodities, like ginger, to other parts of south-east Asia. Already, trade worth over Rs 150 crore is conducted through the small Moreh-Tamu checkpoint at the Manipur-Myanmar border.
FROM Dawki in Meghalaya, around 3 lakh tonnes of coal is sent to Bangladesh annually. A factor that leads Meghalaya Chief Minister Salseng Marak to push for more trade with Bangladesh. A section of locals even opposed the construction of barbed wire fences along Bangladesh's border with Meghalaya. Bhutan's Penden Cement Authority recently exported 978 metric tonnes of boulders to Bangladesh, through the Brahmaputra river in Assam. Following a visit by Bangladesh officials,the river barge service has received a shot in the arm in terms of new business. The 36 barges were lying idle before, now each trip brings Rs 3.75 lakh to the Inland Water department. The department had earlier lost an order to carry 6,000 million tonnes of coal to Bangladesh every month. All this could change now.
The biggest beneficiary among the northeastern states could be Tripura. Despite its abundant natural gas reserves, the state has been shunned by Indian oil and gas giants on the plea of a bad law and order situation. As a result, it is critically dependent on trade with Bangladesh. Recently, a state team came back from the country with 48 joint venture proposals, including some from big Bangla groups like the Anwars. On the anvil are gas-based units and a steel plant. Says an official source in Agartala: "Normally, a truck from here takes 10 days to reach Calcutta, negotiating forest terrain, bad hill roads that get cut off by rain, and insurgents. Through Agartala-Dhaka, the same journey can be made in two days by cargo. For passengers, the time taken will be only 24 hours. That's the level of difference."
The same difference is reflected in the highly lopsided nature of Indo-Bangla trade. Says a spokesman of the Indian Chemical Merchants and Manufacturers Association: "The compound annual growth rate (CAGR) of Indian exports to Bangladesh over 1991 to 1996 is 44.76 per cent. For imports from the country, the CAGR is around 112. 78. We are gradually increasing our imports, thanks to reducing tariff on a number of items." The last fact is disputed by the spokesmen of Bangladesh chambers of commerce. Despite the announcements made by the Indian Government, they claim, many of the proposals have remained on paper for some years now.
At a meeting here recently, A.S.M. Quasem, president of the Dhaka Chamber of Commerce, said that the current trade imbalance is around $93 million in favour of India. "In April 1993," he complained, "India agreed to halve duty on 200 Bangladeshi products and reduce by a quarter the duty on 21 more products under SAPTA. This was followed by a special duty holiday for 513 items. But all these decisions remain mired in red tape." His charges were countered by N.C. Das, regional director of CAPEXIL. He says that compared to an average of 450 trucks loaded with goods crossing into Bangladesh from Bongaon a few months ago, the number had come down to around 150, as Bangladesh has decided to buy its coal and other essentials from China and other countries.
Clearly, effective coordination on both sides to open up road and river routes can ensure that the two neighbours trade more than just charges. While the success or even the ability of the present leadership in Bangladesh in handling local objections is crucial, the trade and other economic advantages likely to accrue are much more important for both countries as well as for the north-eastern states of India. As Mizoram administrative circles explain, prior to the partition, each state had strong politico-economic linkages with corresponding districts of erstwhile East Bengal. Five decades on, the need to renew those links has only become greater.