It is clear that the days of keeping Bangladesh insulated from international traffic and regional connectivity are finally over. This was a scorched -earth policy pursued by the Bangladesh Nationalist party led by Prime Minister Khaleda Zia. Because of her simplistic agenda of opposing India at any cost, Bangladesh had even opposed the proposed Asian highways project through its territory. This project would have helped link South Asia with South East Asia. Bangladesh is currently exploring transit facility linkages with Nepal and Bhutan. It is engaging the former in particular to co-operate in Ganga water sharing arrangements with India and itself. Both India and Bangladesh need to use more water from the Ganga. Their concerns about regional water sharing have been heightened by China building a dam over the upper reaches of the Brahmaputra river (Tsang po in Chinese). The Chinese have assured both countries that usual discharge of water along the Brahmaputra would not be affected.

As it has done with Myanmar, Bangladesh has offered to help Nepal build a hydro power project, through which it may be assured of some supplies to meet its own mounting energy needs. Meanwhile estimates vary widely about the expected gains from allowing transit and transshipment rights to India post April 2010.by Bangladesh. The demand had been pending for a long time. An agreement would not have been possible but for the co-operation extended by Prime Minister Mrs Hasina Wazed of the Awami League.

There is little doubt that the move helps Bangladesh’s economy in a major way. It would be possible to utilize the idle excess capacity of Chittagong and Mongla ports which can handle Indian goods and equipment meant for dispatch to the Northeast states. Bangladesh railways which run at a loss can do with the additional freights traffic round the year. It will help improve the existing rail and road infrastructure, by improving existing roads and highways and upgrading broad gauge connectivity. Road transport would also receive a major boost.

These activities should certainly generate thousands of new jobs and help the economy to grow rapidly. Initial estimates suggest that the economy would register an increased turnover of Rs 20,000 crore over a period of time. However, critics are not convinced. They suggest that initially the gains may be of the order of only Rs 210 crore so. They prefer that Bangladesh should impose proper fees and duties for transshipment and transit of all goods. They cite the example of Switzerland in Europe which charges such fees. They point out that the WTO has specific clauses and provisions relating to international goods traffic.

India stands for a waiver of such duties. Indian authorities have taken steps to exempt more items from Bangladesh more and more items in recent years from import tariff and other duties. It also accords an MFN status to Bangladesh, incorporating a flat 10% waiver on duties at the international border itself.

Bangladesh circles argue that despite such relief, there are plenty of other duties and fees have to be paid, making the task of exporting to the bigger country more difficult. As of now, Bangladesh imports goods and items worth $3.3 billion from India, while exports are of the order of $277 million. , dropping from a peak of $360 million. However, the trend of exports to India is more encouraging than in the past. (IPA)