Ensuring benefits of cooperation reach the people
Tuesday, 2 November 2010
Moazzem Hossain
BANGLADESH should look beyond its gains, actual or perceived, in the form of annual fees from providing transit facilities to India. Such earnings are, no doubt, important for bridging, even partially, its current gap in the form of imbalance in bilateral trade with India. Yet then, there are some strong reasons to consider more realistically the opportunities in areas of new trade-creating and investment-promoting activities within its economy that can be opened up for Bangladesh through the provision of transit facilities or connectivity.
In order to make it a win-win situation, the focus from Bangladesh's point of view should, therefore, be on creation of a synergy that leads to expanded economic activities within the country. Furthermore, the connectivity through transit has the potential for enhancing Bangladesh's economic linkages with India, an emerging power, for mutual benefits. Such linkages can lead to increased trade, more investments and, thus, high growth of the Bangladesh economy. If this happens, that will be a win-win scenario for Indo-Bangladesh bilateral economic relationship in particular.
If one looks closely at developments around the globe, it will be observed that the world is shifting course in a new historic phase. It is impacting the economy, polity, trade, commerce, education and pace of life in all countries. In this era of transformation, the bilateral, regional and international relationships are evolving fast on the economic front. This is taking place in a manner that goes in tandem with the new dynamics of today's vastly-changed -- and still evolving -- circumstances.
There is no good reason to look at the Indo-Bangladesh bilateral relationships in isolation from this on-going global process. The benefits of bilateral cooperation must reach peoples of both sides equitably, so that all can prosper and partnership is sustained on a strong footing.
For such a partnership for cooperation to bear fruits, it will be important to design concrete action programmes and operationalise them for ensuring equitable benefits in some tangible manner. Nothing succeeds like success. With benefits accruing in some visible forms, people's perception in both Bangladesh and India about the advantages of bilateral cooperation will change in a positive direction. Perception does matter in shaping and improving mutually beneficial relationship between two neighbouring countries. This is more so in a situation where asymmetries, in terms of geographical size, stages of economic growth or strengths and broad societal dynamics, are a matter of fact.
India has the advantage of a large internal market and a continental-sized economy with foreign direct investment (FDI) inflows to it quadrupling since 2005 to a very handy $40 billion. It is, indeed, "too large a country to be boxed, into any alliance or regional or sub-regional arrangements, whether trade, economic or political."
Bangladesh, with its gross domestic product estimated at about $100 billion and per capita income at about $650 at current prices, is a much smaller economy. In terms of purchasing power parity (PPP), its per capita income is estimated at about US$ 1500 and GDP, at US$ 225 billion. It is ranked as the 48th largest economy, in terms of PPP, in the world, while India is world's 10th largest economy.
Meanwhile, the findings by the India's apex business promotion body, the Federation of the Indian Chambers of Commerce & Industry (FICCI), suggest that Bangladesh has a lot of potential about increasing its export to India. While the existing balance remains in favour of India, the bilateral trade between the two sides, as the FICCI notes, has not been growing at a considerable rate, despite a long land border the two countries share.
Obstacles and opportunities for mutual trade expansion are, as the FICCI further states in its latest Status Paper on India-Bangladesh Economic relations, "very critical for economic development of both countries, especially of Bangladesh."
For Bangladesh to be in a position to export more to India, a wide array of measures in areas of trade opportunities, market access, investments for producing potential new products, removal of para- and non-tariff barriers, relaxation of rules of origin criteria, preferential treatment etc., do merit consideration. This is where the policy-makers of both the countries should strive hard to take pro-active measures, in conjunction with the efforts of the relevant business bodies on both sides.
Both India and Bangladesh have earlier signed a bilateral investment promotion and protection agreement (BIIPPA). This agreement can be useful for increased flow of investment funds between the two countries to harness the full potential of each other's comparative advantage through appropriate follow-up actions at government and private sector levels by both sides.
In this context, the FICCI rightly emphasizes that India, given its growing economic strength, should be "magnanimous" in its approach towards granting some unilateral trade and related economic concessions in favour of such a close-door neighbour as Bangladesh.
To conclude, asymmetries, however striking these may be, do not provide any rationale for relegating to the background the relevance as well as importance of cooperation between Bangladesh and India with their unique geographical features and locational position. The two countries share nearly 4096 km of land border and India is Bangladesh's second largest import partner, just after China. The realities dictate that both sides make concerted efforts to forge mutually advantageous bilateral partnership for prosperity and well-being of their two peoples.
(Concluded)
BANGLADESH should look beyond its gains, actual or perceived, in the form of annual fees from providing transit facilities to India. Such earnings are, no doubt, important for bridging, even partially, its current gap in the form of imbalance in bilateral trade with India. Yet then, there are some strong reasons to consider more realistically the opportunities in areas of new trade-creating and investment-promoting activities within its economy that can be opened up for Bangladesh through the provision of transit facilities or connectivity.
In order to make it a win-win situation, the focus from Bangladesh's point of view should, therefore, be on creation of a synergy that leads to expanded economic activities within the country. Furthermore, the connectivity through transit has the potential for enhancing Bangladesh's economic linkages with India, an emerging power, for mutual benefits. Such linkages can lead to increased trade, more investments and, thus, high growth of the Bangladesh economy. If this happens, that will be a win-win scenario for Indo-Bangladesh bilateral economic relationship in particular.
If one looks closely at developments around the globe, it will be observed that the world is shifting course in a new historic phase. It is impacting the economy, polity, trade, commerce, education and pace of life in all countries. In this era of transformation, the bilateral, regional and international relationships are evolving fast on the economic front. This is taking place in a manner that goes in tandem with the new dynamics of today's vastly-changed -- and still evolving -- circumstances.
There is no good reason to look at the Indo-Bangladesh bilateral relationships in isolation from this on-going global process. The benefits of bilateral cooperation must reach peoples of both sides equitably, so that all can prosper and partnership is sustained on a strong footing.
For such a partnership for cooperation to bear fruits, it will be important to design concrete action programmes and operationalise them for ensuring equitable benefits in some tangible manner. Nothing succeeds like success. With benefits accruing in some visible forms, people's perception in both Bangladesh and India about the advantages of bilateral cooperation will change in a positive direction. Perception does matter in shaping and improving mutually beneficial relationship between two neighbouring countries. This is more so in a situation where asymmetries, in terms of geographical size, stages of economic growth or strengths and broad societal dynamics, are a matter of fact.
India has the advantage of a large internal market and a continental-sized economy with foreign direct investment (FDI) inflows to it quadrupling since 2005 to a very handy $40 billion. It is, indeed, "too large a country to be boxed, into any alliance or regional or sub-regional arrangements, whether trade, economic or political."
Bangladesh, with its gross domestic product estimated at about $100 billion and per capita income at about $650 at current prices, is a much smaller economy. In terms of purchasing power parity (PPP), its per capita income is estimated at about US$ 1500 and GDP, at US$ 225 billion. It is ranked as the 48th largest economy, in terms of PPP, in the world, while India is world's 10th largest economy.
Meanwhile, the findings by the India's apex business promotion body, the Federation of the Indian Chambers of Commerce & Industry (FICCI), suggest that Bangladesh has a lot of potential about increasing its export to India. While the existing balance remains in favour of India, the bilateral trade between the two sides, as the FICCI notes, has not been growing at a considerable rate, despite a long land border the two countries share.
Obstacles and opportunities for mutual trade expansion are, as the FICCI further states in its latest Status Paper on India-Bangladesh Economic relations, "very critical for economic development of both countries, especially of Bangladesh."
For Bangladesh to be in a position to export more to India, a wide array of measures in areas of trade opportunities, market access, investments for producing potential new products, removal of para- and non-tariff barriers, relaxation of rules of origin criteria, preferential treatment etc., do merit consideration. This is where the policy-makers of both the countries should strive hard to take pro-active measures, in conjunction with the efforts of the relevant business bodies on both sides.
Both India and Bangladesh have earlier signed a bilateral investment promotion and protection agreement (BIIPPA). This agreement can be useful for increased flow of investment funds between the two countries to harness the full potential of each other's comparative advantage through appropriate follow-up actions at government and private sector levels by both sides.
In this context, the FICCI rightly emphasizes that India, given its growing economic strength, should be "magnanimous" in its approach towards granting some unilateral trade and related economic concessions in favour of such a close-door neighbour as Bangladesh.
To conclude, asymmetries, however striking these may be, do not provide any rationale for relegating to the background the relevance as well as importance of cooperation between Bangladesh and India with their unique geographical features and locational position. The two countries share nearly 4096 km of land border and India is Bangladesh's second largest import partner, just after China. The realities dictate that both sides make concerted efforts to forge mutually advantageous bilateral partnership for prosperity and well-being of their two peoples.
(Concluded)