Indian state minister's visit: a web of confusion!
Sunday, 16 November 2008
Syed Muhammad Hussain
In order to set the tone to allow a rational appreciation of the statement and reports regarding the visit of the Indian State Minister, Mr. Jairam Ramesh about ten days ago, let me briefly recall that in a 15-page cover story, one of Dhaka's business journals The Executive Times (Feb. 2008) had presented invaluable inputs from the movers and shakers of Bangladesh business and trade community on "Boosting Exports: Product Diversification and Market Expansion". ET also placed a table of top ten export destinations of our products led obviously by the USA with India as the 10th country.
Despite a glaring fact of a huge trade deficit we continue to run with India, I could not find any reference at all to the strategy we may follow to boost our exports and reduce the gap. Mr. Ramesh provides 2007-8 Indian export figure as US$2.3 billion with a measly US$350 M. of imports from Bangladesh. The Dhaka Chamber of Commerce & Industry (DCCI) President, Mr. Hossain Khaled made a few comments of general nature "..... diversifications of exports is still one of the main challenges,", adding ".... our export market is highly policy sensitive. Any change in market destination impacts on the export volume.." That we need to do so much more to get into Indian market and as one of the respected past presidents of the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) and other Chambers admitted that they had heard so many solemn promises from the highest quarters of India over past decades to ease entry of our products into the Indian market, all to no avail.
Perhaps one could make a strong plea to our policy and decision-makers and to those who turn the wheels of trade and commerce to realise more effectively that India is going to be a hugely expanding market requiring enormous flows of imports of a wide variety of mid-tech, natural resource-based imports and Bangladesh has all the freight, shipment, time and distance advantages. And hence, we do need to study what exactly are the impediments and how to meet those buyers' requirements and what sort of informed and special negotiation skills we can leverage to enter the Indian market. Given that we can claim some moral high ground due to the ever-increasing trade deficit, we could go for a reasonable high level of acceptable, non-exploitative, beneficial investments from India, but as I will expand later, not with any kind of linkages with transit, gas and water issues and this somewhat nebulous balloon of a concept called 'connectivity'. Be that as it may, let me return to the hugely varied and utterly convoluted statements and view Mr. Jairam Ramesh has thrown at us.
It was most intriguing to come across three totally different headlines in three dailies covering the recent visit of Indian's State Minister for Commerce and Power Jairam Ramesh. While The Daily Star (Nov.2) captioned its story 'Transshipment facilities will .yield $120 crores a year for Bangladesh' and The Financial Express (Nov.2) chose to highlight its brief story with 'India seeks power grid connectivity with Bangladesh'. But more revealing was the silence in the media, as far as I could survey, to examine the multi-layered proposals from India. And not so much to the authorities perhaps, these seem to be in the nature of a gimmick and a play at the gallery. At some future date, they could be revived and pursued basically to suit India's own timing and her ambitious regional and global designs. A sort of an attempt to ready a lowly pawn for sacrifice, as far as Bangladesh and other small states in the neighbourhood are concerned.
State Minister of Commerce and Power talked more about signing and selling of power than about the reduction of the ever-building trade gap. And incidentally he came on an invitation to attend the Golden Jubilee celebrations of the DCCI. (It is only the Indians who can sell to their hosts the latter's own dinners. But then Bangladesh has always been a small country with a large heart and keeps on paying for the one dinner they had some 37 ago). Mr. Ramesh also spoke of the transit and transshipment alongwith the current, no pun intended, buzzword 'connectivity' while discussing. Indian's 750 MW power plant in Tripura State just on Bangladesh border. Let us try to unravel from available reports the mega-mix Mr. Ramesh had expounded.
On bilateral trade : India has reduced Safta negative list by 256 items, though a further formidable list of 488 items still remains. Secondly, the Indian Minister is only giving the fairly old position not linked to the requests Bangladesh have been making over the past several years to bring at least a semblance of a balance.
India has agreed to allow export of eight million pieces of RMG which does not appear to be all that significant and which is yet to happen. India has followed a not-so-subtle sweetener for facilitating the realisation of her own demands.
On Investment : India offers a solution towards the reduction of the trade gap by allowing Indian investment in Bangladesh and asks Bangladesh to invest in textiles, pharmaceuticals, paper, processed food industries in India. The latter are very much the low-tech fields where Bangladesh could concentrate on her own rather than having such industries generate a multiplier effect in the Indian economy with Bangladesh becoming an importing hinterland.
And that's why his terming the delays in Tata investments in Bangladesh is to be seen as a 'temporary' divorce. Interesting revelation is the Indian action plan in the pipeline : India is developing seven inland ports for the huge overland trade that India predicts with Bangladesh though I sense India's plan encompasses Nepal, Bhutan and Bangladesh alongwith the access to seven sisters from these seven proposed land parts. In this context, transit / transshipment for India through our sovereign territory is so desperately crucial. More on this issue a little later in this article.
Mr. Jairam Ramesh further talked about India's' dream (must have been blueprinted by now) of creating an Integrated South Asian Energy Grid of a massive proportion. India is now out and about to sell not only the idea but its shares or / and long-term output purchase (LTOP). One could imagine the 750 MW Tripura Power Plant as the first of many links that India would be setting up on the major rivers entering Bangladesh to realise its own Millennium goal of being in control of an incredibly vast, clean, cheap hydro-power chain. A monopolistic ownership of the benefits of the common, trans-boundary, international rivers would leave us all literally high (Nepal, Bhutan), low (Bangladesh) and all dry. After several years of our utter inability to comprehend the sea-change in the Himalayan foothills through the Indian massive Inter-River Linking Project, I will not be at all surprised if India gives the ultimatum - 'you are either with us or against us.'
In this context, Mr. Ramesh proposed to sell 200 MW of electricity to Bangladesh reportedly at the same price as charged from other Indian states. What is not mentioned is the possible subsidy the states enjoy allowing them to have a real shadow price that is not obviously the one for Bangladesh. That India had asked for hugely overrated charges for gas supply some years ago as compared to the Myanmar offer should be in our memory radar. And more directly, we may recall that the last time India made such an offer of sale of electricity quoted per unit price at Tk. 10 to 12, as opposed to our own Power Development Board (PDB) (with all its problems) price averaging Tk. 2.47 per unit.
The Indian State Minister was apparently assuaging Bangladesh disappointment on the failure of Asian Development Bank (ADB)-funded 240 MW Siddhirgonj peking power plant by an Indian company. He requested our authorities for time extension. I hope due compensation for delay by such a long period has been realised as per contractual obligations. Turbine-damage at Bombay Port is not an act to be condoned.
Another curious claim that peak hours for energy use are very different is somewhat erroneous as with one hour and half an hour time difference. India and Bangladesh face almost parallel hours of intense consumption with the Indian eastern states utilising almost three times as much volume. In such an arrangement we may end up sharing the sizeable proportion of load shedding. All these proposals need to come alongwith elaboration of all the technical data and financial implications. And such talks in the passing and in press briefings are more of an exercise in showmanship. Indian State Minister Ramesh hence talked about Dr. Man Mohan Singh's South Asia vision and about India becoming one of the world's leading economic powerhouses soon. That India's vision of a South Asia has no place for multination, regional consultation to harness the region's resources has slipped out of Mr. Ramesh when he retorted 'it is a bilateral connection' to a query on a tripartite hydroelectric power generation involving Nepal as well. Hence, Ramesh's 'connectivity' is India's old ploy of bilateralism in action and South Asia / regionalism / multilateralism in vision only. To accommodate Dr. Singh's vision, SAARC, SAFTA and so on would logically be kept stunted at a sub-operational level. And the process of dismantling of SAARC, or at least the pulling of its reins, was done through half-baked concepts of Growth Triangles, Quadrangles some years ago so gleefully supported by our self-styled intellectuals.
On Transshipment / Transit : All, or almost all, the matters discussed in the foregoing paragraphs apparently set Mr.Jairam Ramesh to come to the crux of his parleys -- transit. As indicated in FE story of November 02, Ramesh sought transit permission to carry the power plant from Kolkata for installation in Tripura. And please let us recall that this is from this to-be-built plant India proposed to sell 200 MW to us. A sort of Ramayana revisited scenario indeed. Transit would reduce Kolkata-Tripura Power Plant site distance by around 1200 km. In another report Ramesh spelt out the Indian intention to get Kolkata-Gouhati, Assam, transit link in addition, on a regular basis. He quoted a figure of US$ 1.2 billion (120 crore) as a possible annual revenue accruing to Bangladesh if India gets these transit (transshipment) facilities. He referred to some joint research report prepared by India and a few South Asian Think Tanks. Regrettably, details of these reports and whether any Bangladeshi collaborator was in it were not made clear.
This somewhat convoluted subject impinges so much on questions of security, infra-structural arrangements, permissible lists of transit / transshipment items and above all, detailed financial benefits over a defined timeframe with renewal, revision, review provisions to safeguard Bangladesh's interest. It is essential to keep in view the long-drawn intense and continuing unrest and agitation both in Darjeeling region and in the 'seven sisters' states and that India continues to allege and accuse Bangladesh' involvement in various ways with the rebel groups in that region. These transit routes could become easily the conduit for India's Union Government as well as the West Bengal Government to send arms, ammunitions, war-related and other explosive materials, drawing the wrath of these forces across our northern and southern borders. We should clearly study the entire security, border protection, cross-border infiltration issues most judiciously before even examining the proposal's other aspects. A cavalier, ill-informed, ill-advised and incompetent approach that seems to be our forte must not be allowed to cloud our judgement. Another vital point is that transit for India through Bangladesh is not a matter of right as it is for Nepal, Bhutan or any land-locked country. Thirdly, it is India's great need and would save her at least US$ 7.0 to 10 billion with the reduction of distance, time and the high level of safety of the passage.
The last, and in my view, a most important point relates to our ability to withstand the subtle, and not-so-subtle, pressures to put transit issue in a basket deal of trade, investment, power supply, water and so forth. Transit must be dealt with on its own and on its own merit or demerit. Mr. Jairam Ramesh, a relatively low level representative of the Indian juggernaut, has spread out such a web of images of past, present and future in so many diverse fields promising what has been promised time and again before, selling something which is not there, but asking in return for very solid things very much geared in the present. One does feel nervous when the big shots from across will be in action to realise their Prime Minister's South Asia, and quite possibly a world, vision.
The writer, a Secretary and Ambassador (rtd), can be reached at: syedmhussain@yahoo.com
In order to set the tone to allow a rational appreciation of the statement and reports regarding the visit of the Indian State Minister, Mr. Jairam Ramesh about ten days ago, let me briefly recall that in a 15-page cover story, one of Dhaka's business journals The Executive Times (Feb. 2008) had presented invaluable inputs from the movers and shakers of Bangladesh business and trade community on "Boosting Exports: Product Diversification and Market Expansion". ET also placed a table of top ten export destinations of our products led obviously by the USA with India as the 10th country.
Despite a glaring fact of a huge trade deficit we continue to run with India, I could not find any reference at all to the strategy we may follow to boost our exports and reduce the gap. Mr. Ramesh provides 2007-8 Indian export figure as US$2.3 billion with a measly US$350 M. of imports from Bangladesh. The Dhaka Chamber of Commerce & Industry (DCCI) President, Mr. Hossain Khaled made a few comments of general nature "..... diversifications of exports is still one of the main challenges,", adding ".... our export market is highly policy sensitive. Any change in market destination impacts on the export volume.." That we need to do so much more to get into Indian market and as one of the respected past presidents of the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI) and other Chambers admitted that they had heard so many solemn promises from the highest quarters of India over past decades to ease entry of our products into the Indian market, all to no avail.
Perhaps one could make a strong plea to our policy and decision-makers and to those who turn the wheels of trade and commerce to realise more effectively that India is going to be a hugely expanding market requiring enormous flows of imports of a wide variety of mid-tech, natural resource-based imports and Bangladesh has all the freight, shipment, time and distance advantages. And hence, we do need to study what exactly are the impediments and how to meet those buyers' requirements and what sort of informed and special negotiation skills we can leverage to enter the Indian market. Given that we can claim some moral high ground due to the ever-increasing trade deficit, we could go for a reasonable high level of acceptable, non-exploitative, beneficial investments from India, but as I will expand later, not with any kind of linkages with transit, gas and water issues and this somewhat nebulous balloon of a concept called 'connectivity'. Be that as it may, let me return to the hugely varied and utterly convoluted statements and view Mr. Jairam Ramesh has thrown at us.
It was most intriguing to come across three totally different headlines in three dailies covering the recent visit of Indian's State Minister for Commerce and Power Jairam Ramesh. While The Daily Star (Nov.2) captioned its story 'Transshipment facilities will .yield $120 crores a year for Bangladesh' and The Financial Express (Nov.2) chose to highlight its brief story with 'India seeks power grid connectivity with Bangladesh'. But more revealing was the silence in the media, as far as I could survey, to examine the multi-layered proposals from India. And not so much to the authorities perhaps, these seem to be in the nature of a gimmick and a play at the gallery. At some future date, they could be revived and pursued basically to suit India's own timing and her ambitious regional and global designs. A sort of an attempt to ready a lowly pawn for sacrifice, as far as Bangladesh and other small states in the neighbourhood are concerned.
State Minister of Commerce and Power talked more about signing and selling of power than about the reduction of the ever-building trade gap. And incidentally he came on an invitation to attend the Golden Jubilee celebrations of the DCCI. (It is only the Indians who can sell to their hosts the latter's own dinners. But then Bangladesh has always been a small country with a large heart and keeps on paying for the one dinner they had some 37 ago). Mr. Ramesh also spoke of the transit and transshipment alongwith the current, no pun intended, buzzword 'connectivity' while discussing. Indian's 750 MW power plant in Tripura State just on Bangladesh border. Let us try to unravel from available reports the mega-mix Mr. Ramesh had expounded.
On bilateral trade : India has reduced Safta negative list by 256 items, though a further formidable list of 488 items still remains. Secondly, the Indian Minister is only giving the fairly old position not linked to the requests Bangladesh have been making over the past several years to bring at least a semblance of a balance.
India has agreed to allow export of eight million pieces of RMG which does not appear to be all that significant and which is yet to happen. India has followed a not-so-subtle sweetener for facilitating the realisation of her own demands.
On Investment : India offers a solution towards the reduction of the trade gap by allowing Indian investment in Bangladesh and asks Bangladesh to invest in textiles, pharmaceuticals, paper, processed food industries in India. The latter are very much the low-tech fields where Bangladesh could concentrate on her own rather than having such industries generate a multiplier effect in the Indian economy with Bangladesh becoming an importing hinterland.
And that's why his terming the delays in Tata investments in Bangladesh is to be seen as a 'temporary' divorce. Interesting revelation is the Indian action plan in the pipeline : India is developing seven inland ports for the huge overland trade that India predicts with Bangladesh though I sense India's plan encompasses Nepal, Bhutan and Bangladesh alongwith the access to seven sisters from these seven proposed land parts. In this context, transit / transshipment for India through our sovereign territory is so desperately crucial. More on this issue a little later in this article.
Mr. Jairam Ramesh further talked about India's' dream (must have been blueprinted by now) of creating an Integrated South Asian Energy Grid of a massive proportion. India is now out and about to sell not only the idea but its shares or / and long-term output purchase (LTOP). One could imagine the 750 MW Tripura Power Plant as the first of many links that India would be setting up on the major rivers entering Bangladesh to realise its own Millennium goal of being in control of an incredibly vast, clean, cheap hydro-power chain. A monopolistic ownership of the benefits of the common, trans-boundary, international rivers would leave us all literally high (Nepal, Bhutan), low (Bangladesh) and all dry. After several years of our utter inability to comprehend the sea-change in the Himalayan foothills through the Indian massive Inter-River Linking Project, I will not be at all surprised if India gives the ultimatum - 'you are either with us or against us.'
In this context, Mr. Ramesh proposed to sell 200 MW of electricity to Bangladesh reportedly at the same price as charged from other Indian states. What is not mentioned is the possible subsidy the states enjoy allowing them to have a real shadow price that is not obviously the one for Bangladesh. That India had asked for hugely overrated charges for gas supply some years ago as compared to the Myanmar offer should be in our memory radar. And more directly, we may recall that the last time India made such an offer of sale of electricity quoted per unit price at Tk. 10 to 12, as opposed to our own Power Development Board (PDB) (with all its problems) price averaging Tk. 2.47 per unit.
The Indian State Minister was apparently assuaging Bangladesh disappointment on the failure of Asian Development Bank (ADB)-funded 240 MW Siddhirgonj peking power plant by an Indian company. He requested our authorities for time extension. I hope due compensation for delay by such a long period has been realised as per contractual obligations. Turbine-damage at Bombay Port is not an act to be condoned.
Another curious claim that peak hours for energy use are very different is somewhat erroneous as with one hour and half an hour time difference. India and Bangladesh face almost parallel hours of intense consumption with the Indian eastern states utilising almost three times as much volume. In such an arrangement we may end up sharing the sizeable proportion of load shedding. All these proposals need to come alongwith elaboration of all the technical data and financial implications. And such talks in the passing and in press briefings are more of an exercise in showmanship. Indian State Minister Ramesh hence talked about Dr. Man Mohan Singh's South Asia vision and about India becoming one of the world's leading economic powerhouses soon. That India's vision of a South Asia has no place for multination, regional consultation to harness the region's resources has slipped out of Mr. Ramesh when he retorted 'it is a bilateral connection' to a query on a tripartite hydroelectric power generation involving Nepal as well. Hence, Ramesh's 'connectivity' is India's old ploy of bilateralism in action and South Asia / regionalism / multilateralism in vision only. To accommodate Dr. Singh's vision, SAARC, SAFTA and so on would logically be kept stunted at a sub-operational level. And the process of dismantling of SAARC, or at least the pulling of its reins, was done through half-baked concepts of Growth Triangles, Quadrangles some years ago so gleefully supported by our self-styled intellectuals.
On Transshipment / Transit : All, or almost all, the matters discussed in the foregoing paragraphs apparently set Mr.Jairam Ramesh to come to the crux of his parleys -- transit. As indicated in FE story of November 02, Ramesh sought transit permission to carry the power plant from Kolkata for installation in Tripura. And please let us recall that this is from this to-be-built plant India proposed to sell 200 MW to us. A sort of Ramayana revisited scenario indeed. Transit would reduce Kolkata-Tripura Power Plant site distance by around 1200 km. In another report Ramesh spelt out the Indian intention to get Kolkata-Gouhati, Assam, transit link in addition, on a regular basis. He quoted a figure of US$ 1.2 billion (120 crore) as a possible annual revenue accruing to Bangladesh if India gets these transit (transshipment) facilities. He referred to some joint research report prepared by India and a few South Asian Think Tanks. Regrettably, details of these reports and whether any Bangladeshi collaborator was in it were not made clear.
This somewhat convoluted subject impinges so much on questions of security, infra-structural arrangements, permissible lists of transit / transshipment items and above all, detailed financial benefits over a defined timeframe with renewal, revision, review provisions to safeguard Bangladesh's interest. It is essential to keep in view the long-drawn intense and continuing unrest and agitation both in Darjeeling region and in the 'seven sisters' states and that India continues to allege and accuse Bangladesh' involvement in various ways with the rebel groups in that region. These transit routes could become easily the conduit for India's Union Government as well as the West Bengal Government to send arms, ammunitions, war-related and other explosive materials, drawing the wrath of these forces across our northern and southern borders. We should clearly study the entire security, border protection, cross-border infiltration issues most judiciously before even examining the proposal's other aspects. A cavalier, ill-informed, ill-advised and incompetent approach that seems to be our forte must not be allowed to cloud our judgement. Another vital point is that transit for India through Bangladesh is not a matter of right as it is for Nepal, Bhutan or any land-locked country. Thirdly, it is India's great need and would save her at least US$ 7.0 to 10 billion with the reduction of distance, time and the high level of safety of the passage.
The last, and in my view, a most important point relates to our ability to withstand the subtle, and not-so-subtle, pressures to put transit issue in a basket deal of trade, investment, power supply, water and so forth. Transit must be dealt with on its own and on its own merit or demerit. Mr. Jairam Ramesh, a relatively low level representative of the Indian juggernaut, has spread out such a web of images of past, present and future in so many diverse fields promising what has been promised time and again before, selling something which is not there, but asking in return for very solid things very much geared in the present. One does feel nervous when the big shots from across will be in action to realise their Prime Minister's South Asia, and quite possibly a world, vision.
The writer, a Secretary and Ambassador (rtd), can be reached at: syedmhussain@yahoo.com