Bangladesh, India and Modi-nomics

Narendra Modi's landslide victory elevates a highly-touted business-friendly Gujarati model to revitalise a sluggish Indian economy. What does this mean for Bangladesh?
Even an ordinarily impressive 5.0 per cent growth rate today is not enough for a country as young as India, with half the population belonging to the below-25 age-group. As 20 million youths enter the workforce each year, 8.0 million will come up empty-handed. How will Modi correct the economic malaise and quench the Hindutva thirst?
In his timely publication, Modinomics: Inclusive Economics, Inclusive Governance, Sameer Kochhar identifies 'good governance and good economics,' as well as 'leadership, initiative, grit, passion, commitment and, above all, innovation,' as its constituents. Inclusiveness is critical. His 'financial inclusion' envisioned 'more people to enjoy the fruits of growth,' encouraging 'greater demand, and thereby furthering overall growth.' It reflected Modi's 'less government and more governance' campaign pledge.
Modi's 'Brand India' is translated into a 'Five T-Plan,' emphasising talent, trade, technology, tourism, and tradition. Each was a Gujarat success story when he was the Chief Minister (2002-14), prompting him to promise India a similar vikas, or development. What Kochhar calls governance, Ram Mashru labels 'corporatist capitalism.' It worked in Gujarat.
This 'Gujarat model' boasted a 10 per cent growth rate when India was averaging 7.5 per cent under Manmohan Singh's minority government?still the highest decade-long growth rate in the Indian history. Modi made Gujarat the platform for a quarter of the country's exports, building a mammoth ship-breaking and ship-recycling yard in Aalang, while also signing over 100 memoranda of understanding for special economic zones. Investment poured in from foreign enterprises (Colgate, Ford, General Motors, among others), and domestic, both private (Ambani and Tata, among others) and public (Gujarat Narmada Valley Fertilisers Company, Gujarat State Petroleum Corporation, Gujarat State Fertilisers and Chemicals Limited, and Gujarat Mineral Development Corporation).
Modi constructed the world's largest oil refinery in Jamnagar (built by Dhirubhai Ambani's Reliance Industries Limited), and an impressive highway infrastructure; exploited Gujarat's vast mineral resources (bauxite, coal, lignite, among others), boosted agriculture (cotton, peanuts, dates, sugar-cane, and dairy products making Gujarat the largest milk-producer state in India) and supplied what has been called '24-hour electricity.' Led by the Ambani brothers, businessmen found a political champion. In a June 2013 survey, the US American Enterprise Initiative and YouGov, found private enterprises preferred BJP (Bharatiya Janata Party)  over Congress by a 60-30 margin.
Not everyone is impressed. Mashru, for example, argues Gujarat's growth rate was higher than India's even before Modi became the Chief Minister and the World Bank's 2014 Doing Business Report found India posting the worst investment environment in South Asia: it ranked 134th, (Sri Lanka was ranked 85th, Pakistan 110th, and Bangladesh 130th), which was worse than its 132nd ranking in 2013 (with Sri Lanka at 81st, Pakistan a 107th, and Bangladesh at 129th). Mashru highlights Modi's dubious record 'on the rule of law, social cohesion, and individual well-being' made him an 'undesirable template.' Furthermore, out of 29 states in India, for example, Gujarat ranks 14th in poverty reduction, female literacy, and infant mortality, with a 33 per cent child malnutrition rate and 11th in human development indicators, in part because of its 15 per cent tribal population, and in part due to trickle-down business although Gujarat's agricultural growth became a paradoxical model in a business-driven environment.
The Muslim fate is worse. In the south of Ahmedabad (a Muslim name to curiously survive Hindutva onslaughts), half a million Muslims live in the Juhapura slum without the '24-hour electricity' or other basic necessities. Any Muslim persecution, as in 2002, will expand this population. Successful Modinomics in India might also elevate Muslim ghettoes in a nationalist India, generating soft-power pressures upon Bangladesh.
Bangladesh and India share a thorny relation. We are the ostensible source of unwanted emigrants and water-sharing problems to the masses, but a necessary partner to Indian businessmen, central political leaders, and Indian migrants to Bangladesh. To diplomats, issues like trade, investment, migration, and water-sharing/land demarcation demand more attention.
Trade overwhelmingly favours India. Though Bangladesh became, in 2013, India's largest South Asian trading partner, the widening trade gap of US$4 billion annually in 2012-13 (as opposed to US$1.5 billion in 2007) is unsustainable, especially when a federalism-based disjuncture permits Indian states to block our RMG exports even with the central government clearance while farm imports from India increasingly fill our own domestic food-supply gaps.
Albert O. Hirschman's description of how Adolf Hitler colonised East Europe is revealing. He noted two effects of relevance: the supply-effect, meaning 'more plentiful supply of goods' or replacing 'goods wanted less by goods wanted more,' which keeps Bangladesh a hostage of Indian supplies and the influence-effect, arguably 'a direct source of power,' which hopes to acquire 'a share in the wealth of another country.'
Investment shows a similar asymmetric trajectory. After Bangladesh turned down a US$3 billion Tata offer to build a power plant, a fertiliser factory, and a steel mill (the largest offer ever made to us, equalling all the foreign direct investment received between 1971 and 2006), the central government offered a US$1.0 billion loan to Bangladesh in 2009, one-fifth of it as an outright grant. Joint manufacturing was not in the cards.
Migration could serve the casus belli issue: Modi called the 20 million Bangalee emigrants (his figures) 'infiltrators', as half-a-million Indians in Bangladesh remit over US$3.0 billion to India, making poverty-stricken Bangladesh India's fifth largest remittance source. Deprived Indians heading west from its eastern provinces for jobs have often been labelled Bangladeshis but Hindu persecution inside Bangladesh fuels Indian anger.
Water-sharing and enclave-related boundary demarcation in north-west Bangladesh remains explosive. Modi's campaign plan to revitalise 'Maa Ganga' rattles the 1996 Farakka Agreement. Yet, this is the best arrangement Bangladesh could get from India, even as three-quarters of Bangladeshi waterways have literally disappeared. With India unilaterally diverting water from 43 of the 54 rivers entering Bangladesh, dry-season cultivation has altered Khulna's ecology, while wet-season overflow disrupts Rajshahi and Faridpur farming. A similar catastrophe awaits 21 million Bangladeshis along the Teesta plains in Rangpur, while 8.0 million Indians benefit. Two central government agreements on the Teesta were vetoed by Paschimbanga's Chief Minister Mamata Banerjee of the Trinmool Congress, forcing Sheikh Hasina's government to reduce its original 50 per cent water-sharing demand to 25 per cent. Meanwhile, the BJP's interest in a 200-kilometre Ganges-Brahmaputra link from Jogigopa to Farakka through Bangladesh is also combustible.  As part of a National River Linking Project plan, it would displace many Bangladeshi farmers from a very high-growth area, prompting Bangladesh to insist China, where the river originates, join any negotiations.
Since congruence can produce capitulation, what can we do, given Modi?
Our interests should not become Modi-dependent. To 'Modi-fy' them, finding alternate sources for our Indian imports is a start: if it is agricultural, several Southeast Asian countries have surpluses we can purchase and if it is manufactured end-products, like trucks, again Southeast Asian countries, China, and Japan offer substitutes. Similarly with investment, we could turn to the private international market, forge new networks of relations, invite better technology, open space for innovation, and return fully to the international community after our annus horribilis, 2013, abandonment. For immigration, we must protect minority human rights to neutralise India's most frequent and legitimate complaint, regulate Indian immigrants, and control our own would-be emigrants more emphatically by generating domestic jobs. Finally, like India, we seriously need a comprehensive waterway plan ourselves.
Breaking the status quo if it hinders our welfare (rather than have it broken by India on Indian whims) should not be interpreted as our Armageddon. A strong and sustainable domestic agenda to withstand external pressure is one Modi lesson we must learn and learn quickly.
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