Balancing priorities

There are those highly critical of Indian terms in Bangladesh utilising both a $500 million line of credit (LOC) for defence cooperation as well as the $2.0 billion infrastructure development. The criticism comes from the perspective of hands-tied choices of sourcing and apparently inventory requirements. In the infrastructure credit, projects and services have to be offered to Indian firms first. While this isn't a first, it sticks out like a sore thumb.

Bangladesh's Armed forces have traditionally sourced their equipment and armaments from Russia and China. The submarine deal with Beijing raised concerns in India, though Prime Minister Sheikh Hasina stuck to her guns. The current agreement with India may well be a conciliatory gesture but its implications run deep. Indian armaments aren't necessarily the best available. It may do wonders to Prime Minister Narendra Modi's 'make in India' policy but an open ledger stating the nature of Bangladesh's build-up to a modern force rankles. Realistically speaking, there are only two countries with which Bangladesh will ever have the prospective of military engagement, that too defensive. One is India and the other, Myanmar. Conflict is unlikely barring sabre-rattling at best.

Defence cooperation in training and joint exercises is helpful, especially in tackling terrorism where we have seen such outstanding success. Nonetheless, it is doubtful whether reciprocal arrangements whereby India provides details of its future defence make-up will ever be forthcoming. During the Second World War, the United Kingdom raked up massive debts with the United States for armaments they needed but couldn't afford. It was a painful process involving complicated mortgaging of landed assets and really long-term re-payment schedules. Bangladesh will be mindful of having to repay the $2.5 billion loan and the interest thereof.

Trade between the subcontinental neighbours are heavily weighted in India's favour and Bangladesh's response to anti-dumping and countervailing taxes have been meek, to put it lightly. There are few products, international brands manufactured in India or Indian brands that aren't available officially. Unofficially all forms of grocery items are awash in markets through the 'informal border trade'. On the contrary, India's cost of internal trade has been significantly reduced with the gilded benefits of transshipment at minimal or no cost by land and river. The Padma Bridge, when completed, will have provisions for direct connectivity between Kolkata, Kunming and Myanmar. The very large population of India makes it a market of opportunity for small entrepreneurs. There are consumers and there are price-bands.

Prospects of industrialisation beyond that what already has taken place may be limited due to matters of scale. Perhaps that's more the reason for reviewing import policies, seeking further substitution and nurturing small and medium enterprises (SMEs) to become the vital backward linkage required. Friendship cannot mean keeling over and public statements from responsible persons to the tune of 'we can't do without them' as response to bandied far-right nationalistic and insufferable statements from across the border aren't the done thing. As Mr. Donald Trump is finding out, integrated economies and integrated production come with over-arching dependencies that are challenging conventional political thinking.

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