Creating a South Asian Community:

India-Bangladesh Relations


 

Ambassador Farooq Sobhan,
Ladies and Gentlemen

Thank you for arranging this event and for this opportunity to speak to such a distinguished audience. I know that Ambassador Sobhan changed his plans to make this possible. Your institute has played an important role in innovative policy approaches on a wide range of domestic and international issues. It is an honour to be here.

I thought I would speak today on the idea of a South Asian community, where we stand in that quest, and on how India and Bangladesh, as two important countries of the region, can help to realize this vision.

The Idea

The idea of a South Asian community has a long history. It was partly an instinctive reaction to our history in the late nineteenth and the first half of the twentieth century. More than that, it recognizes that historically our periods of prosperity and well-being have come when the subcontinent was connected to itself and to the rest of the world. Our best times economically, politically and culturally, have been when we worked together and were linked together. It was then that we managed to realize our potential. This was the impulse that led Bangladesh to suggest the formation of SAARC and to host its first summit.

Given the situation we found ourselves in, it was natural that thinking South Asians would envisage such a community as a means to free our people from poverty, enabling each of our citizens to lead a life of dignity, free from hunger and illiteracy.

The objective basis for such a community exists. In comparison to other sub-regions in the world, our subcontinent probably has more affinities and common historical experience than most.

That is why Prime Minister Manmohan Singh has said that we need to work for a South Asian Community where borders have ceased to matter, and where there is an unhindered flow of goods and peoples, culture and ideas. We believe that the destiny of the people of South Asia is interlinked. It is not just our past that links us, but our future too.

Our leaders have endorsed the vision of a South Asian community formally at successive SAARC summits since 1998. At the fourteenth summit in New Delhi this April they envisioned a South Asian community where there was a smooth flow of goods, services, peoples, technologies, knowledge, capital, culture and ideas in the region.

The Present Opportunity

Unfortunately, our real progress towards this goal has been uneven and limited by the intervention of political factors. In 1948 over 34% of our trade was within the Indian sub-continent. Today it is less than 6%. This is the lowest amongst all the regions in the world, except perhaps for sub-Saharan Africa. SAFTA and other measures which would have enabled us to break out of the patterns of the recent past are only now being operationalised, and even then not by all of us. The list of future steps remains long.

Fortunately there is recognition within the region today of an opportunity to break out of the sterile patterns of some of our relationships in South Asia, and to put in place the building blocks of a true South Asian community.

This opportunity arises because of changes in India, changes in our neighbours, and a relatively benign international environment. South Asia is today one of the fastest growing regions of the world.

India has seen sustained economic development, with about 6% growth over the last twenty-five years, accelerating in the last three years to over 8%. The resulting changes in the structure and competences of the Indian economy, and the scale and pace of changes in India, have meant that we in the subcontinent have complementarities that never existed before. The potential to work together for mutual economic benefit is greater than ever before.

We believe that India’s economic growth offers unique opportunities to our neighbours, who can become stakeholders in this expanding economy. Some of our neighbours have been quick to recognise the benefits of cooperation. The India-Sri Lanka FTA, which became operational in 2000, quadrupled bilateral trade in six years, (from US$ 658 million in 2000 to US$ 2.3 billion in 2006), with Sri Lankan exports growing much faster than India’s and thus redressing the balance of trade somewhat. The FTA attracted Indian investment to Sri Lanka, made Indians the largest source of tourism income, and converted Sri Lankan Airlines into the largest foreign airline operating in India, with 90 flights a week! That FTA would not have been possible without the changes in the Indian economy after 1991, and that opportunity is available to India’s other neighbours.

India’s preferential trade agreements with neighbours do not seek reciprocity and recognize asymmetry. At the recent SAARC Summit Prime Minister Manmohan Singh announced that SAARC LDCs like Bangladesh will enjoy zero-duty access to the Indian market by the end of this year. We will also prune our sensitive list of items considerably. We are well on course to implement these commitments.

Secondly, our neighbours have seen sustained economic growth and change, despite some difficult political situations. I do not have to tell you about the changes in Bangladesh and your own remarkable economic performance. High growth rates in the region are an opportunity to advance together through trade, open borders and economic cooperation, to bring about shared prosperity between India and her neighbors. Between us economics is no longer a zero-sum game.

The rate at which trade in South Asia has grown recently, (and the extent of the unofficial trade), suggest that the potential complementarities created by recent changes are still far from being tapped. Some estimates say that while official two-way India-Bangladesh trade in 2005-6 was US$ 1.83 billion, informal trade may be twice as much again.

Interestingly technological changes such as the internet and satellite TV have also meant that today there is increased exposure and interaction among the peoples of our countries, breaking down stereotypes and building popular support for cooperative relationships.

Finally the international environment is also conducive. The post Cold War world that we are in today is one where globalization and other trends have led to a degree of unprecedented inter-dependence between the major powers, where they are therefore engaged in both competition and cooperation simultaneously. A new international balance of power is evolving and there is a window of opportunity which can be helpful to our quest for development.

The SAARC Summit in April proved some of these propositions. It was easily the least contentious and smoothest summit that we have seen, and was productive and practical. Afghanistan became a formal member, decisions were taken on establishing a South Asian University and a South Asia Food Bank, and the regional multi-modal transport study was approved. We are now working on concrete projects for implementation by SAARC in energy, food, environment and water (including flood control).

It therefore seems that a combination of factors has created a window of opportunity for us to remake our relationships in the subcontinent.

Challenges

This is not to say that there are no obstacles to our realizing the vision of a South Asian community. If the opportunities are economic, the challenges that come to mind immediately are primarily political. Terrorism is one such. A South Asian community can hardly be realized if terrorist violence and the politics of hate and confrontation continue in our subcontinent.

Common threats, like fundamentalism and terrorism, which recognise no boundaries, must be confronted together. India is ready to work with together with her neighbours in this quest. We must confront such obstacles with our united efforts.

Political transitions also pose a challenge. Many of us are in the midst of political and socio-economic change. It is for each of our countries to choose its own political path. But these choices also have broader consequences and effects. India will not interfere in the internal affairs of her neighbours, believing that decisions on their own future are best taken by the people of these countries themselves through free, fair and democratic political processes. We are close neighbours with shared destinies. It is natural, therefore, that India sees a peaceful, democratic and prospering neighbourhood as being in our own interest. Security, democracy and economic development are the best answers to common threats like fundamentalism and terrorism and the political misuse of religion.

The vision of a South Asian community must include as an essential component the idea of a South Asia free from violence and disputes, at peace with itself, free to concentrate on its primary tasks of abolishing poverty, improving the life of its people as well as seeking common prosperity.

The Way Forward

The successful outcome of the 14th SAARC Summit in New Delhi in April this year is an encouraging sign that our countries recognise the value of mutual cooperation. To realize the vision of a South Asian community several steps could be taken in tandem.

We need to work on improving physical and economic connectivity and our connectivity of the mind. Dismantling barriers will enable not only cross-border investment flows and transfer of technology, but also facilitate market access to a wide range of small and middle-sized businesses that may not be able to enter developed markets. In our case, Bangladeshi handicrafts, ethnic clothing, Jamdani sarees, marine, poultry and dairy products, fruits and vegetables could then be easily exported to India.

Then there needs to be a freer flow of people across the region to build upon the cultural and civilizational affinities that we enjoy.

There is also a need to work together to deal with the challenges of terrorism and other threats to the life, peace and security of all our peoples. No country can pretend that one man's terrorist is another’s freedom fighter. No government can pretend that what happens across the border is not going to hurt it.

Be it poverty, be it disease, be it natural disasters, or future challenges such as energy security, food security, water or climate change, the destiny of South Asia is inter-linked and we must learn to work together to deal with these challenges.

India – Bangladesh Relations

A few words on India-Bangladesh relations. We see better relations between India and Bangladesh as integral to a South Asian community. After all it was Bangladesh’s vision, which put forward the idea of SAARC.

A peaceful, stable, democratic, secular and prosperous Bangladesh is in India’s own national interest. Our unique relations are based on shared history, culture, traditions and common language and literature. India attaches the utmost importance to strengthening our friendly and cooperative ties with Bangladesh. I also wish to reiterate that India fully respects Bangladesh’s independence and sovereignty. The people of Bangladesh and their political parties should resolve outstanding issues through discussions and dialogue among themselves, rather than through external intervention or pressure.

It is natural for close neighbours to have problems. Intimacy is not always easy. In the last few days, during our foreign office consultations and in meetings with your leaders, we have sought to review the entire gamut of our relationship, the positive and the complicated, and sought mutually satisfactory solutions or ways forward together. We have discussed issues such as security, our land boundary, the rivers that join us and other emotive issues. We have also looked at the complementarities that creates our opportunity.

I see positive trends in our relations with Bangladesh and am confident that these will become stronger in the coming years. Our commonalities far outweigh our differences. About half a million Bangladeshis visited India legally last year. Visitors between us always return with a profound impression of inherent goodwill. Businessmen from both countries are increasingly discovering that it is most convenient to procure goods and services from each other, rather than from more distant sources. I am particularly pleased by the sharp increase in Bangladesh’s exports to India in the last two years.

Bangladesh’s geographical location and its common border with a number of Indian States offer considerable opportunities. Over 80% of our bilateral trade is currently routed through Benapole-Petropole. We hope to diversify, opening additional routes and Land Customs Stations. We hope that the Kolkata-Dhaka passenger train can commence operations soon and will be the precursor for a comprehensive network of bus, train and ferry links. We can also cooperate to revive our waterways, which once carried so many of our goods. India is willing to improve air connectivity by establishing daily air services to our metropolitan cities, Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Kolkata, and to 18 other destinations across India.

The possibility of Bangladesh exploiting its strategic geographic location to position itself as a transportation hub for South Asia, South East Asia and China, by upgrading roads, railways and ports, has been articulated by prominent Bangladeshis, such as Nobel Laureate Mohammad Yunus and Prof. Rehman Sobhan, among others. Better connectivity can include linking national power grids, gas pipelines, and telecommunications, to overcome shortages in certain areas and create synergy.

India is prepared to work with friends in Bangladesh to take our bilateral relations to an “irreversible higher trajectory” and to strengthen cooperation in all spheres. We have revived existing mechanisms for bilateral dialogue and hope to intensify these exchanges. We look forward to identifying solutions to outstanding issues through friendly negotiations and to ensuring that the people of our countries can enjoy the fruits of vigorous interaction and buoyant linkages.

Conclusion

To conclude, I am optimistic about our future. Prime Minister Manmohan Singh has said that, “every Indian wants to live in a neighbourhood of peace, stability and prosperity. People in our neighbouring countries share the same aspirations”. The common aspirations of our peoples provide the basis on which we can work together to usher in an era of peace and prosperity for our peoples. Let us remake our relations and remake our future

Back