Indian Premier Manmohan Singh's September 6 visit may well offer the best chance for the two nations to finally come out of a cold era to sunshine and a lot will depend on how he holds out to the bold steps Bangladesh Prime Minister Sheikh Hasina took during her visit to Delhi last year to mend relationship.
Whether that relationship will be durable and rewarding will be determined by how India deals the crucial issues on offer -- transit, Teesta river water sharing, trade, electricity trading and border demarcation.
Hasina had taken a huge political risks during her historic visit to India and made a number of promises on crucial and taboo issues such as giving transit to India, allowing Delhi to use its ports and not allowing terrorist outfits to use Bangladesh soil.
Hasina went out of the box in making these decisions, and the courage she showed for regional cooperation was unknown so far.
Now it is Manmohan's turn to translate into action his words that he would do everything possible to “remain beside Bangladesh for a stable and sustainable democracy”. Hasina had set the ground for regional cooperation and Manmohan has to build it for long-term and durable continuation of any arrangement.
A win-win situation for India and a win-win plus for Bangladesh is what is now needed to push the relationship forward. And India's stance on three crucial issues -- transit, water sharing and trade -- would be the determining factor. Bangladesh must see that it benefits from transit in terms of fees earned and connectivity, that it gets a fair share of water and that its goods get a preferential treatment in Indian market.
And thus time has come for the two leaders to make a historic transformation of relationship for the two countries, for Saarc and for the world where small and big countries reside side by side.
Probably the most far reaching, debatable and visible issue that would see considerable progress during Manmohan's visit would be transit. India wants to connect its eastern part, almost inaccessible because of difficult terrain and Bangladesh sitting in between, with its western part. For that it wants to get road, rail and river access through Bangladesh.
This opens up new development possibilities for Bangladesh. It can get world class roads and develop its rail system that has been so moribund. It can earn fees for transit. A committee has already indicated that the minimum transit fee can be between 2.5 cents to 7 cents depending on the mode of transport. Bangladesh can let its Chittagong and Mongla ports be used by India for a fee and thereby become a hub of activities. And since the transit would also have a regional face with Nepal and Bhutan included, it would spur a regional development as well. A mindset change would come over and Bangladesh would possess a wayward mentality in trade activities.
At the same time worries are high too. The government has discussed little the transit issue at either political or other platforms. It has not discussed the issue at its cabinet or parliament. There has not been any attempt to hold debate. This leaves a lot of political risks when the main opposition BNP rattles that it would not allow transit to take place.
The massive investment, calculated to be Tk 50,000 crore initially, is also a matter of both interest and concern. The investment would certainly bring new dynamism to economy. But where this money would come from and in what form would be crucial. With the present corrupt state of the Roads and Highway Department and the inefficiency of the communications ministry, could the improved roads and railways be properly maintained?
Knowing the kind of domestic pressures the government is likely to face from the opposition, India must walk the extra mile to assuage fears and affirm confidence among the people of Bangladesh. Here the government's skill in negotiating that extra mile is also important. For example, can it persuade India into converting its $1 billion loan into grant because this money would ultimately go into work to facilitate transit? Can it get a higher transit fee? Can it persuade India to put 61 items that we have been asking for off the negative list? This trade issue is important because this would mean Bangladesh would get a real chance to shrink the trade imbalance with India. Bangladeshi garment exporters would get a good chance to expand market. India had already allowed Bangladesh to export initially 8 million pieces of readymade garments which was then extended to 10 million pieces. And such was the performance of Bangladeshi exporters that this quota of 10 million pieces was exhausted in six months. So with a duty- and quota-free access, Bangladesh would find another big market in India.
The non-tariff barriers are also another issue that Bangladesh can negotiate with India through this transit. Bangladesh exporters find such barriers as the major hurdle to exports to India. Indian authorities do not want to accept standards testing from Bangladeshi institutions. Cement exporters complain that their product is tested twice -- once in Bangladesh and again in India -- resulting in cost and time escalation. Import licence- and letter of credit-related problems also exist. Not every Indian bank can open LC for import from Bangladesh. India often does not want to accept the rules of origin certificates. Warehousing problem is also a major barrier. And Bangladeshi spinners still lament the Indian government's decision to restrict export of one million bales of cotton despite deals cut with private exporters.
So Bangladesh can pursue these issues and India can show its openness by resolving these immediately.
Another important issue for Bangladesh is the sharing of Teesta River. Teesta is a lifeline for a vast stretch of farmlands in Bangladesh and over the years its many tributaries and streams have dried up causing immense misery to the people of this floodplain. The Teesta Barrage Project that envisioned irrigation of some 50,000 acres of land can now hardly irrigate 15,000 acres. Bangladesh now gets only about 5,000 cusec water on this river that needs to be enhanced to 40,000 cusec. It is up to Manmohan whether India would win the hearts of the Bangladeshi farmers.
Bangladesh and India are also moving closer to a power trade deal. India will supply 250 MW to Bangladesh by end-2012 or early 2013. Another 250MW will be supplied later. But what is crucial here is the rate at which India will supply electricity. It is already hinted that the rate will be quite higher at Tk 5 a unit (Bangladesh's bulk electricity rate is about Tk 2.5 a unit). It would be expected that India export electricity at its internal rate which would be lower than what has been offered.
Bangladesh now waits to see whether India opens up its hands to create a win-win situation. The hope runs high because since the last elections, Bangladesh has gone quite a long way to meet various demands of India such as stopping support to ULFA, fighting terrorism, handing over important terrorist leaders to Delhi and so on. Now it can expect reciprocity. Expectation is also high because India's policy towards its neighbours has also changed. It no longer wants animosity with the people living around it and so has embarked on a fence-mending mission.
So during Manmohan's visit, Dhaka would be waiting for positive actions from the giant nation. Whether the agreements that will be reached on these crucial issues will outlast any political landscape will depend on how India now respects Bangladesh's good wishes.