Regional cooperation, connectivity hold key to trade, investment
Sunday, 7 February 2010
FE Report
Improved regional cooperation and connectivity can boost trade and investment while securing access to water and energy for Bangladesh and its neighbours, policy experts said Saturday, but they acknowledged building public support remains a challenge.
In addition to increased exports and revenues, they estimated better regional ties, especially Bangladesh's relations with India, would help drive up the country's growth rate by an additional 2.0 per cent per year.
Speaking at a PRI seminar, Finance Minister AMA Muhith called the prime minister's visit to India the "biggest achievement," saying the agreements sealed during the tour have opened up a new vista in the relations between Dhaka and New Delhi.
Policy Research Institute (PRI) organised the seminar at its auditorium in the city, where Foreign Minister Dr Dipu Moni was the special guest.
Noted economist Prof Wahiduddin Mahmud of Dhaka University chaired the seminar that focused on issues related to accelerated growth and poverty reduction through regional cooperation.
Prime minister Sheikh Hasina visited India from January 10 to 13, her first since taking office in January last year in landslide victory.
The Dhaka-New Delhi deals have five key implications: Withdrawal of restrictions on trade and investment, opening up of Chittagong and Mongla ports to neighbouring nations, regional electricity trading and cooperation on water resources.
PRI has estimated that income from exports, transit and port fees are likely to increase by US$1.0 billion a year in the short-to-medium term.
Experts at the seminar suggested effective and immediate steps to implement the recent agreements concluded with India.
Some key policy-makers of the government who took part in the seminar, responded positively to the suggestions.
The experts were broadly unanimous in their view that the recent agreements would benefit Bangladesh most, irrespective of the advantages that the agreements would offer to India.
A number of frontline policy-makers, eminent economists, researchers, diplomats, business leaders and representatives of multi-donor agencies participated in the seminar.
Finance minister Abul Maal Abdul Muhith and Foreign Minister Dipu Moni were the chief guest and the special guest respectively at the seminar.
Dr Mashihur Rahman, economic affairs adviser to the Prime Minister and PRI Vice Chairman Dr Sadiq Ahmed presented two separate keynote papers on the theme of seminar. It was moderated by eminent economist Professor Wahiduddin Mahmud. Dr. Zaidi Sattar, Chairman, PRI welcomed the guests and participants.
Among others, Adviser to the Prime Minister HT Imam, Executive Chairman of Board of Investment (BoI) Dr SA Samad, former finance minister M Saiduzzaman, former adviser to the past caretaker government Dr Mirza Azizul Islam, former foreign minister Anisul Islam Mahmud, former state minister for planning Dr Mahiuddin Khan Alamgir, independent lawmaker Fazlul Azim, Prof. M. Tamim, former adviser to the caretaker government, Farooq Sobhan of Bangladesh Enterprise Institute and Mr. Rahmatullah, transport economist took part in the open discussions.
Finance Minister Muhith termed the recent Bangladesh-India agreements as one of the biggest successes of the present government in last one year of the elected government of Primer Minister Sheikh Hasina, for improving bilateral relations with India.
The agreements, he noted, are the beginning for establishing long-lasting bilateral and regional cooperation to help achieve economic growth in this region.
Referring to the geographical position of Bangladesh, the finance minister said the country should take advantage of it through strengthening bilateral and regional cooperation. The plain topography of Bangladesh provided an additional advantage for which this land over the centuries played its role as the transit point for a vast region, he noted.
He said the recent agreements with India would certainly bring Bangladesh benefits in areas of trade, energy and sharing of water resources.
Muhith said Bangladesh, along with India, Nepal and Bhutan, would explore the immense opportunity for making the best use of regional energy resources including hydro-power, for mutual interests.
The finance minister said the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman often compared Bangladesh with Switzerland, keeping its locational advantage in view, to offer regional connectivity and transit. Bangladesh can get the benefits of the transit like that of Switzerland in Europe, he added.
The finance minister said sharing of water depends on basic planning and both Bangladesh and India are working on ensuring the best uses of the natural resources.
He observed that Bangladesh, as a lower riparian country, should receive all support and cooperation for river dredging and other related works.
Presenting his keynote paper to the seminar, Economic Affairs Adviser to the Prime Minister Dr Mashihur Rahman suggested a holistic approach to appreciating the ultimate benefit of the agreement, reached with India during the recent visit of Prime Minister Sheikh Hasina.
One cannot see the real benefit of the bilateral and regional cooperation with a narrow focus on a single issue, instead of looking at its entire aspect, he noted.
The adviser said trade and transit were not new issues on the agreement but those had been remained undressed for a long time.
The new things in the agreements are the cooperation in energy and sharing of port facilities, he pointed out while stating that such cooperation would benefit Bangladesh to a large extent than that of India.
Dr Mashihur termed the negative criticism of agreements as fallacy and advised all to be proactive in the interest of the country.
Dr Mashiur Rahman said cooperation with India is situated in the broader sub-regional context and aims at what he called "citizens' welfare" through accelerated development.
Dr Rahman said access to India's North Eastern states through Bangladesh's ports and territory has implications for preferential or enhanced access of local products to India.
Referring to the use of Mongla and Chittagong ports, he said while access to Bangladesh's biggest sea port allows India to transport goods to its less-developed regions, the use of Mongla port rather would be beneficial, for Nepal and Bhutan.
"Mongla is a competitor of Kolkata and Haldia for cargo to Bhutan and Nepal," he said, allaying critics' views of the lopsided deals with India.
In his key-note presentation, noted economist and PRI vice-chairman Dr Sadiq Ahmed identified some major challenges facing Bangladesh, noting poverty and low per capita income as critical constraints to its sustainable development. Better relations with India will help Bangladesh to accelerate growth, he added.
"Cooperation will help secure better energy security," PRI Vice Chairman Dr Sadiq Ahmed said, adding it will help reduce spatial disparity through better connectivity and investment.
Over the longer-term, he said more and better regional cooperation will help increase Bangladesh's growth rate by an additional 2.0 percentage per year.
Currently, Bangladesh has a large trade deficit with India because of very low exports.
With cooperation, he said, exports can grow from $350 million to $800-900 million.
While Bangladesh laments its downstream locational disadvantage emerging from the flow of international rivers, the PRI vice chair said it doesn't celebrate its two major edges: tremendous access to sea and being the gateway between South Asia and East Asia and also between South Asia and central Asia.
Dr Ahmed observed Bangladesh can become a Asian commercial hub through better land, air and sea connectivity.
Economist and former finance adviser Professor Wahiduddin Mahmud considered the agreements beneficial and suggested creating public opinion for effective implementation of the agreements.
Single reciprocity is not good, Prof Wahiduddin Mahmud said, adding "unless you combine all issues, you can't gain much."
Prof Mahmud said sharing regional resources remains a big challenge, and this requires an analytical work.
He said water shouldn't be a zero-sum game.
"It's a question of building confidence and fostering investment," he said.
He also urged the government to be a part of the Asian Highway, saying: "If you are not a part of it, you're going to miss out."
Former finance minister M Saiduzzaman called for identifying the priorities for addressing bilateral issues. He recommended the inclusion of food security and sharing of research on development in the bilateral agenda.
Adviser to the Prime Minister HT Imam said implementation of agreements in their true spirit is the main challenge now.
He called for identifying the priority issues and taking of appropriate steps to implement the agreements for regional development.
Former Planning Minister Dr Mohiuddin Khan Alamgir MP said bilateral negotiations with India would be more fruitful than the regional approach as India in its foreign policy emphasises bilateral strategy for this region.
Former finance adviser to the past caretaker government Mirza Azizul Islam brushed aside negative criticism of the agreement. "We should consider whether or not we would be better with or without the agreements," he said.
Mirza Aziz believes that good relations with India would benefit Bangladesh, but he suggested that there should be efficient negotiations for ensuring the best gains for the country from bilateral treaties.
Addressing the seminar as the special guest, Foreign Minister Dipu Moni said the recent agreement had melted the ice in the bilateral relations between Bangladesh and India.
"The entire nation was forced to take a blind anti-Indian stance after 1975 only for narrow partisan benefit," she said while noting that those days had gone.
She said the nation now looks not forward to not only improving bilateral relations, but also to building greater regional cooperation.
Dipu Moni said the government can not alone do this job, it needs cooperation from all other political parties and civil society.
The foreign minister called for shunning from the bad practice of opposing only for expressing merely a different opinion.
She said the government is implementing its election manifesto where there is no room for compromise on issues of national interests.
"We are committed to fulfilling the election manifesto for protecting democracy, fighting poverty, accelerating growth and establishing regional harmony," she said.
To achieve this goal, the foreign minister said the government had been endeavouring hard, though discussions, by following the legal procedures to settle some important issues with India.
Mentioning arbitration on some issues with India, she said the process is not contradictory to the process of bilateral negotiations.
"We will withdraw arbitration in case of success through negotiations and discussions," she pointed out.
Independent lawmaker Fazlul Azim said Bangladesh failed to secure a timeframe for the implementation of the deals as the history of two-way relations was not so good.
"Essence is time. We've been dragging our feet over decades for the lack of time," he told the audience.
He also underscored the need for a political breakthrough in forging a common platform with regard to negotiation with India.
Prof M Tamim said power import from India's Northeastern region is feasible, but not from Nepal or Bhutan, which has deficit in electricity generation.
President of Bangladesh Enterprise Institute Farooq Sobhan agreed with the views that the development with India is an "important beginning" but noted "hard work of implementation lies ahead."
He advised the government to appoint two senior persons to follow-up with the implementation status of the deals if Dhaka wants to take its relations with New Delhi to the next level.
Mr Sobhan, also a former foreign secretary, said Bangladesh should move toward signing a free trade agreement with India in view of its similar steps to do so with China and ASEAN.
Improved regional cooperation and connectivity can boost trade and investment while securing access to water and energy for Bangladesh and its neighbours, policy experts said Saturday, but they acknowledged building public support remains a challenge.
In addition to increased exports and revenues, they estimated better regional ties, especially Bangladesh's relations with India, would help drive up the country's growth rate by an additional 2.0 per cent per year.
Speaking at a PRI seminar, Finance Minister AMA Muhith called the prime minister's visit to India the "biggest achievement," saying the agreements sealed during the tour have opened up a new vista in the relations between Dhaka and New Delhi.
Policy Research Institute (PRI) organised the seminar at its auditorium in the city, where Foreign Minister Dr Dipu Moni was the special guest.
Noted economist Prof Wahiduddin Mahmud of Dhaka University chaired the seminar that focused on issues related to accelerated growth and poverty reduction through regional cooperation.
Prime minister Sheikh Hasina visited India from January 10 to 13, her first since taking office in January last year in landslide victory.
The Dhaka-New Delhi deals have five key implications: Withdrawal of restrictions on trade and investment, opening up of Chittagong and Mongla ports to neighbouring nations, regional electricity trading and cooperation on water resources.
PRI has estimated that income from exports, transit and port fees are likely to increase by US$1.0 billion a year in the short-to-medium term.
Experts at the seminar suggested effective and immediate steps to implement the recent agreements concluded with India.
Some key policy-makers of the government who took part in the seminar, responded positively to the suggestions.
The experts were broadly unanimous in their view that the recent agreements would benefit Bangladesh most, irrespective of the advantages that the agreements would offer to India.
A number of frontline policy-makers, eminent economists, researchers, diplomats, business leaders and representatives of multi-donor agencies participated in the seminar.
Finance minister Abul Maal Abdul Muhith and Foreign Minister Dipu Moni were the chief guest and the special guest respectively at the seminar.
Dr Mashihur Rahman, economic affairs adviser to the Prime Minister and PRI Vice Chairman Dr Sadiq Ahmed presented two separate keynote papers on the theme of seminar. It was moderated by eminent economist Professor Wahiduddin Mahmud. Dr. Zaidi Sattar, Chairman, PRI welcomed the guests and participants.
Among others, Adviser to the Prime Minister HT Imam, Executive Chairman of Board of Investment (BoI) Dr SA Samad, former finance minister M Saiduzzaman, former adviser to the past caretaker government Dr Mirza Azizul Islam, former foreign minister Anisul Islam Mahmud, former state minister for planning Dr Mahiuddin Khan Alamgir, independent lawmaker Fazlul Azim, Prof. M. Tamim, former adviser to the caretaker government, Farooq Sobhan of Bangladesh Enterprise Institute and Mr. Rahmatullah, transport economist took part in the open discussions.
Finance Minister Muhith termed the recent Bangladesh-India agreements as one of the biggest successes of the present government in last one year of the elected government of Primer Minister Sheikh Hasina, for improving bilateral relations with India.
The agreements, he noted, are the beginning for establishing long-lasting bilateral and regional cooperation to help achieve economic growth in this region.
Referring to the geographical position of Bangladesh, the finance minister said the country should take advantage of it through strengthening bilateral and regional cooperation. The plain topography of Bangladesh provided an additional advantage for which this land over the centuries played its role as the transit point for a vast region, he noted.
He said the recent agreements with India would certainly bring Bangladesh benefits in areas of trade, energy and sharing of water resources.
Muhith said Bangladesh, along with India, Nepal and Bhutan, would explore the immense opportunity for making the best use of regional energy resources including hydro-power, for mutual interests.
The finance minister said the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman often compared Bangladesh with Switzerland, keeping its locational advantage in view, to offer regional connectivity and transit. Bangladesh can get the benefits of the transit like that of Switzerland in Europe, he added.
The finance minister said sharing of water depends on basic planning and both Bangladesh and India are working on ensuring the best uses of the natural resources.
He observed that Bangladesh, as a lower riparian country, should receive all support and cooperation for river dredging and other related works.
Presenting his keynote paper to the seminar, Economic Affairs Adviser to the Prime Minister Dr Mashihur Rahman suggested a holistic approach to appreciating the ultimate benefit of the agreement, reached with India during the recent visit of Prime Minister Sheikh Hasina.
One cannot see the real benefit of the bilateral and regional cooperation with a narrow focus on a single issue, instead of looking at its entire aspect, he noted.
The adviser said trade and transit were not new issues on the agreement but those had been remained undressed for a long time.
The new things in the agreements are the cooperation in energy and sharing of port facilities, he pointed out while stating that such cooperation would benefit Bangladesh to a large extent than that of India.
Dr Mashihur termed the negative criticism of agreements as fallacy and advised all to be proactive in the interest of the country.
Dr Mashiur Rahman said cooperation with India is situated in the broader sub-regional context and aims at what he called "citizens' welfare" through accelerated development.
Dr Rahman said access to India's North Eastern states through Bangladesh's ports and territory has implications for preferential or enhanced access of local products to India.
Referring to the use of Mongla and Chittagong ports, he said while access to Bangladesh's biggest sea port allows India to transport goods to its less-developed regions, the use of Mongla port rather would be beneficial, for Nepal and Bhutan.
"Mongla is a competitor of Kolkata and Haldia for cargo to Bhutan and Nepal," he said, allaying critics' views of the lopsided deals with India.
In his key-note presentation, noted economist and PRI vice-chairman Dr Sadiq Ahmed identified some major challenges facing Bangladesh, noting poverty and low per capita income as critical constraints to its sustainable development. Better relations with India will help Bangladesh to accelerate growth, he added.
"Cooperation will help secure better energy security," PRI Vice Chairman Dr Sadiq Ahmed said, adding it will help reduce spatial disparity through better connectivity and investment.
Over the longer-term, he said more and better regional cooperation will help increase Bangladesh's growth rate by an additional 2.0 percentage per year.
Currently, Bangladesh has a large trade deficit with India because of very low exports.
With cooperation, he said, exports can grow from $350 million to $800-900 million.
While Bangladesh laments its downstream locational disadvantage emerging from the flow of international rivers, the PRI vice chair said it doesn't celebrate its two major edges: tremendous access to sea and being the gateway between South Asia and East Asia and also between South Asia and central Asia.
Dr Ahmed observed Bangladesh can become a Asian commercial hub through better land, air and sea connectivity.
Economist and former finance adviser Professor Wahiduddin Mahmud considered the agreements beneficial and suggested creating public opinion for effective implementation of the agreements.
Single reciprocity is not good, Prof Wahiduddin Mahmud said, adding "unless you combine all issues, you can't gain much."
Prof Mahmud said sharing regional resources remains a big challenge, and this requires an analytical work.
He said water shouldn't be a zero-sum game.
"It's a question of building confidence and fostering investment," he said.
He also urged the government to be a part of the Asian Highway, saying: "If you are not a part of it, you're going to miss out."
Former finance minister M Saiduzzaman called for identifying the priorities for addressing bilateral issues. He recommended the inclusion of food security and sharing of research on development in the bilateral agenda.
Adviser to the Prime Minister HT Imam said implementation of agreements in their true spirit is the main challenge now.
He called for identifying the priority issues and taking of appropriate steps to implement the agreements for regional development.
Former Planning Minister Dr Mohiuddin Khan Alamgir MP said bilateral negotiations with India would be more fruitful than the regional approach as India in its foreign policy emphasises bilateral strategy for this region.
Former finance adviser to the past caretaker government Mirza Azizul Islam brushed aside negative criticism of the agreement. "We should consider whether or not we would be better with or without the agreements," he said.
Mirza Aziz believes that good relations with India would benefit Bangladesh, but he suggested that there should be efficient negotiations for ensuring the best gains for the country from bilateral treaties.
Addressing the seminar as the special guest, Foreign Minister Dipu Moni said the recent agreement had melted the ice in the bilateral relations between Bangladesh and India.
"The entire nation was forced to take a blind anti-Indian stance after 1975 only for narrow partisan benefit," she said while noting that those days had gone.
She said the nation now looks not forward to not only improving bilateral relations, but also to building greater regional cooperation.
Dipu Moni said the government can not alone do this job, it needs cooperation from all other political parties and civil society.
The foreign minister called for shunning from the bad practice of opposing only for expressing merely a different opinion.
She said the government is implementing its election manifesto where there is no room for compromise on issues of national interests.
"We are committed to fulfilling the election manifesto for protecting democracy, fighting poverty, accelerating growth and establishing regional harmony," she said.
To achieve this goal, the foreign minister said the government had been endeavouring hard, though discussions, by following the legal procedures to settle some important issues with India.
Mentioning arbitration on some issues with India, she said the process is not contradictory to the process of bilateral negotiations.
"We will withdraw arbitration in case of success through negotiations and discussions," she pointed out.
Independent lawmaker Fazlul Azim said Bangladesh failed to secure a timeframe for the implementation of the deals as the history of two-way relations was not so good.
"Essence is time. We've been dragging our feet over decades for the lack of time," he told the audience.
He also underscored the need for a political breakthrough in forging a common platform with regard to negotiation with India.
Prof M Tamim said power import from India's Northeastern region is feasible, but not from Nepal or Bhutan, which has deficit in electricity generation.
President of Bangladesh Enterprise Institute Farooq Sobhan agreed with the views that the development with India is an "important beginning" but noted "hard work of implementation lies ahead."
He advised the government to appoint two senior persons to follow-up with the implementation status of the deals if Dhaka wants to take its relations with New Delhi to the next level.
Mr Sobhan, also a former foreign secretary, said Bangladesh should move toward signing a free trade agreement with India in view of its similar steps to do so with China and ASEAN.