The Transit Issue between Bangladesh & India

Abstract:
Economic integration, faithful relationship, exploit less market structure, safe border system are necessary for the development of the sub-continent. Now-a-days transit is one of the most popular & crucial matter for mutual development.Transit issues have long been a sub ect of debate, but we think the issue should be looked at from a business and economic point of view rather than a political one. The issue can be looked at positively if our economy benefits by providing transit facilities to our neighbors. !angladesh can become a regional transport hub. she can benefit tremendously through opening up transit and great opportunities for crossing from east to west and giving the land-locked neighbors access to the sea. The "hittagong port can become a modern busy port like #ingapore serving the #$$%" countries and even "hina. &uge foreign investment may be attracted to !angladesh and finally a throbbing service sector like banks, insurance, hotels, rest houses, petrol pumps etc. There is an estimate of direct economic gain from transit fees. It ranges from 500 crore taka to 4,666 crore taka per year. The last but not the least, is the mutual transit. !angladesh, in return, will get a much shorter route to "hina, which already is its second largest trading partner. 'nfortunately, most of the trading now-a-days takes place through sea-route. The cost of import increases, as well as !angladeshi goods loose competitiveness in "hinese market. (f !angladesh wants to access #outh "hinese underdeveloped market, they must go through (ndia. (ndia plays a ma or role in !angladesh)s trade sector. In 1996, about 25 percent *approximately+ of total imports *both legal and illegal+ in !angladesh came from (ndia. !angladeshi products constituted only 0.5 percent *approximately+ of total (ndian imports. (ndia)s informal and formal exports to !angladesh stand at around 5 b!ll!on "ollars while !angladesh)s exports are about #5$ m!ll!on during the financial year of 200%&0$. (t is ,uite true that (ndia)s economy is large and there could be a reasonable si-e of trade deficit with (ndia. !ut that is excessive. The economic relationship between !angladesh and (ndia has the potential of being mutually beneficial and rewarding. &owever, at present the situation is not one of interdependence but of one-sided dependence on the part of !angladesh. The large bilateral trade deficit that exists in favor of (ndia needs to be reduced before this scenario can be changed. #o it is expected that providing transit facilities would also help !angladesh to improve the !./ situation with (ndia as well as expanding trade baskets to include more products from !angladesh. !angladesh needs to play a leading role in facilitating connectivity.

1. Intro"uct!on:
$s development becomes the primary focus, nations attempt to advance their interests through bilateral regional and international cooperation. Even #tates that have traditionally been sovereignty sensitive, at least in terms of integrating themselves through roads, today, are trying to negotiate multilateral economic arrangements that include transit and transportation across their national boundaries. !angladesh, which has traditionally opposed such an idea on the grounds of sovereignty and security, is slowly ad usting to this phenomenon. The issue of transit to (ndia has propped up, this time with
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

a renewed and very firm demand from (ndia for allowing (ndian goods and passenger transport ingress into, and egress out of !angladesh, from and into (ndian territory. The re,uest has been lying with the !angladesh government since mid-0112. 3any in (ndia perceived !angladesh as an 4economic bridge4 between (ndia5s northeastern states and the rest of the country. 6or (ndia, it makes extremely good economic sense to be able to use a corridor to its northeastern states. (t would spare them constructing a long and tortuous road through hostile territory, infested with insurgents of many hues. (t had been estimated -- in the 571s -- that construction of new tracks would cost %s. 0 crore per kilometre. Transit is not only beneficial for (ndia but also for !angladesh. (nsofar as the economic return is concerned it, too, was an undetermined element in the transit discourse. There was no gainsaying what would be the economic benefits for !angladesh, and what opportunity costs that we might have to count by allowing (ndia the transit facility. $s a burning issue, intellectuals & politicians etc focus transit issue from multidimensional view points. #ome of them emphasis on security & political instability etc. .ther concentrate on sovereignty etc. #o there are serious security issues that are associated with the transit that must be brought into consideration in any future negotiation, and if there are economic dividends that we can derive that are positively proportional to the investment, so much the better. This must be made amply clear to (ndia. 6or transit deal, the bilateral connectivity between two countries, which re,uires faithful, cooperative relation based on past experiences about previous deals, agreements & co operations etc. !angladesh has a vast experiences about (ndia)s did, because (ndia is a neighbor country with largest boarder. Transit has never been a forgotten issue, at least not for (ndia. !ut we guess it has become a rather embarrassing matter for !angladesh -not knowing perhaps how to convey to (ndia that there are other compelling factors that influence policies. (t is futile to compare a similar situation obtaining in other parts of the world with this. (t would be erroneous to see such issues in merely economic terms -- in any case economics do not drive politics in #outh $sia, in fact the reverse is true. (n this context, we clarify our knowledge about the concept of transit. (t is also necessary to know our cost-benefit for transit. #ecurity & #overeignty should be also concentrated. 6inally we decide what should be our benefits over costs to make transit as beneficial for both countries.

2. *et)o"ology: 2.1 2oncepts:

(t is said that the system of trade routes first originated with the nomadic people who along with their cattle, sheep, assess and goats had often moved from their places in search of fresh pastures. (n course of time, the route was used by the traders as in the process asses, oxen, horses, yak were tamed and utili-ed for carrying goods. This was the beginning of this trade process, which was at first based on barter and exchange and later
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

on money. Now-a -days the route has become an important element to fostering international trade. !ased on security, sovereignty as well as involvement of the countries the rout is commonly known as Transit or Transshipment or corridor . Though these three words seem to be similar, there is a clear distinction among them. 8enerally in the corridor, a country gives some kind of rights or control on the land to the other country making it a defector of its territory, while in transit there is no ,uestion of rights involved in the land territory allowed for transit. (t provides only transit facilities under certain conditions and can be withdrawn. 6or example, under the !angladesh-(ndia 972: ;and !oundary $greement, !angladesh wanted a lease in perpetuity an area of (ndia)s territory 92< meters = <> meters near Tin !igha to connect enclave ?ahagram with main land of !angladesh. The transit for a country is mainly access through a country to the third one. 6or example, (ndia has a transit to $fghanistan through (ran. #o, (ndian goods can board from (ranian ports and go through to $fghanistan. &owever, due to geographical complexity, in this case, the transit refers to connectivity between North-East (ndian seven states with mainland (ndia, especially @est !engal. The goods carried from North East, comes to mainland (ndia through a strip of $ssam and North !engal, taking a route miles longer than what could have been a shortest through !angladesh. !angladesh govt. never allowed (ndia to have a transit in return of a hefty transit fee offered by (ndia. The transit, that could have been a win-win situation, has been refused as a threat to National security. The other point of interest here could be the transshipment. &ere, Transit refers to the passage across !angladesh territory of (ndian goods to and from the north Eastern states of (ndia using (ndian owned surface transport, while transshipment refers to the same movement using !angladesh-owned transport.

2.2 3!terature re4!e(:

5e4!" 3e(!s showed that an often-cited ob ective of light rail transit is to encourage formation of neighborhoods with diverse living, work and leisure activities within easy walking and wheelchair reach. (n the "incinnati, the total value of transit-oriented development can be approximated as the sum of benefits arising from community economic development and congestion relief. The benefits of light %ail transits don)t always exceed the costs, but oftentimes they do. The rail lines economic benefits would likely exceed costs by almost A<11 million over a B1 year period. Amatya, 'a6 7-pen"ra showed that Nepali exporters and importers are the high cost and time taken in the transportation of goods to and from "hina. Nepali businessmen do not have the complete business information about "hina to establish working relation with their "hinese counterparts in different cities of "hina. There is no doubt both (ndia and "hina would extend support to build infrastructure in Nepal, if the country could give some vision of its transit economy. !esides it would attract foreign investment and promote tourism and revenue as well. .nce strategic rivals, (ndia and "hina have now turned into business partners and for them the route through Nepal is shorter and reliable. (ndia has agreed to provide over > billion rupees for a pro ect targeting to upgrade border check posts along the Nepal-(ndia border within the coming three years. (ndia is going to spend almost 9> billion rupees on her side in setting up link roads along the borderC
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

which will, without any doubt serve as a good link once "hina and (ndia will have some substantial deal to use Nepal as a transit point. The time is ripe that through the vision of a transit economy, Nepal could lift her position from that of an unstable economy to a stable one. Nepal wishes to see that upcoming transit routes would serve as a modern D#ilk %oad) that will connect "hina with rest of #outh $sia through Nepal. +)a)e"ul Anam said that !oth !angladesh and (ndia were connected by road and rail link up to 97E> is well known. %ail links existed between the two countries prior to #eptember E, 97E>, and were discontinued after the outbreak of the war between (ndia and /akistan. There were three road links connecting (ndia with !angladesh. National &ighway No. B> connected "alcutta to !arisal and !ongaon to ?haka. National &ighway No. B> connected /etrapole to !arisal, and National &ighway No. :1 connected #iliguri and 8uwahati to "hittagong and ?haka via "omilla. $fter 9729, both the countries had expressed political will to utili-e the economic complementarities for mutual benefits. $nd in the spirit of mutual cooperation, !angladesh had, in fact, agreed to accord 4transit4 facility through the signing of the (ndo-!angladesh Trade $greement on 3arch 0<, 9720, and !angladesh could, by the same token, use the facility for its own benefit. The $greement provided for 4mutually beneficial arrangements for the use of their waterways, railways and roadways for commerce between the two countries and for passage of goods between two places in one country through the territory of the other. Many in India perceived Bangladesh as an "economic bridge" between India's northeastern states and the rest of the country !or India" it ma#es e$tremely good economic sense to be able to use a corridor to its northeastern states It would spare them constructing a long and tortuous road through hostile territory" infested with insurgents of many hues It had been estimated -- in the '%&s -- that construction of new trac#s would cost 's ( crore per #ilometre It would cost many times more that amount now The $wami ;eague government, which had in principal approved the proposal *Fune 977<+ for the passage of goods between places in (ndia via !angladesh -- 4provided they are conveyed by !angladeshi carriers,4 had not provided this facility during its tenure.The 9720 agreement was for one year. $ new trade agreement signed on .ctober :, 97<1 had similar proviso for surface connectivity, but that the surface links, except by river routes, did not come about has to do with everything other than economics. A)me" 8!9am showed that the $wami ;eague government in 9720 had a one-year agreement with (ndia for the 4use of their waterways, railways, and roadways for commerce between the two countries and for passage of goods between two places in one country through the territory of the other.4 The $; government under #heikh &asina in 977E-0119 also agreed to reopen the old !ongaon *(ndia+ and Fessore *!angladesh+ broad gauge railway line closed since the (ndia-/akistan war in 97E>. Earlier, the Ershad government signed a working agreement in 9771 with (ndia to reopen the broad gauge. !egum Gia5s government in 977B made transit facilities conditional on the 6arrakhan water issue. (n 011E, it again snubbed (ndian plea for transit on grounds of water sharing, national security, and domestic trade protection.

'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

(t is necessary for !angladeshi people to oppose the vested class favoring protectionism. &owever, our politicians, usually, do not have the dedication or the intellectual conviction to stand up for critical issues such as free trade and transit. Therefore, these matters are sadly in the hands of planners and schemers who free-e the liberali-ation process with complex regulations and extended lobbying to protect their interests. There are strong claims that (ndia will swamp the !angladeshi economy by its sheer si-e, as many theoreticians predict, and as the market nearly prove today, but one must only look to the example of &ong Hong, a free exporting and importing country that has been flourishing next to mainland "hina for years. #imilar free trade system is in Taiwan and #ingapore. They became strong economic powers by keeping their economies open. (t is their liberal economic principles not their si-e or balanced trade accounts that have kept their economy healthy and rich. 'as)!" wrote that the proposed $sian &ighway route provides transit rights to (ndia through !angladesh because both the entry and exit are with (ndia from !angladesh. !angladesh government is naturally concerned about it without reciprocal transit rights from (ndia. (t seems that this is a misplaced concern in view of the fact that at the ?haka #$$%" #ummit, (ndia5s /rime 3inister made it clear that (ndia was agreeable to provide transit rights to #$$%" countries. &e proposedI 4;et us agree, at this #ummit, that all #outh $sian countries would provide to each other, reciprocally, transit facilities to third countries, not connecting one another but also connecting to the larger $sian neighborhoods, in 8ulf, "entral $sia and #outh East $sia4. .bviously the /rime 3inister had in his mind not only transit rights within #outh $sia but also the road connecting 0B countries through proposed $sian &ighway network. .)e )aily *tar wrote that the main gainer of this whole process would be the people of North-East of (ndia. %ight now, anything produced in that region can not be marketed in the rest of (ndia, due to the distance from port *Holkata+. 6rom past decade, (ndia is becoming more dependent on foreign and private investments in growth picture. !ut, no company will want to invest in this remote corner of the Northeast, because of the logistical problems of #evens #isters linking in with the rest of (ndia. #o the only real economic future of Northeast lies in reopening its route through !angladesh to its @est and with 3yanmar and #outh-East $sia to the East. 6or additional benefit, if they are allowed to use a !angladesh port, the export oriented business can also come up in this region. The region is rich in energy resources, like natural gas and hydro-electricity. The economic progress in this region can stop a long-standing grievance and insurgency resulted. The "hittagong port can become a modern busy port like #ingapore serving the #$$%" countries and even "hina. &uge foreign investment may be attracted to !angladesh and finally a throbbing service sector like banks, insurance, hotels, rest houses, petrol pumps etc. may develop around the Tran)s continental roads and railways. There is an estimate of direct economic gain from transit fees. (t ranges from >11 crore taka to :,EEE crore taka. The last but not the least, is the mutual transit. !angladesh, in return, will get a much shorter route to "hina, which already is its second largest trading partner. 'nfortunately, most of the trading nowadays takes place through sea-route. The cost of import increases, as well as !angladeshi goods loose competitiveness in "hinese market. (f !angladesh wants to access #outh "hinese underdeveloped market, they must
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

go through (ndia. This was a point of concern for the "hinese delegates during Hunming initiative in 9777, an initiative to link "hinese province of Junan with #even #isters of (ndia, 3yanmar, Thailand and !angladesh.

#. :ropose" trans!t bet(een ;angla"es) 7 In"!a:

!angladesh would become the prime route for trafficking heroin to Europe from #outh East $sia, if !angladesh allows transit to (ndia, according to the (nternational Narcotics "ontrol !oard *(N"!+.(n addition to, the geographical nature of !angladesh, in particular its long borders with (ndia and 3yanmar, would make it particularly suitable for heroin trafficking,K the (N"! adds.

3ocat!on: proposed transit rout between !? & (ndia along with other countries.

The main intention of (ndia for transit is to passage it)s goods and passenger transport ingress into, and egress out of !angladesh, from and into (ndian territory. !angladesh as an 4economic bridge4 between (ndia5s north-eastern states and the rest of the country has been re,uested to allow transit since mid-0112. 6or (ndia, it makes extremely good economic sense to be able to use a corridor to its northeastern states. (ndia has to across 9011km to passage it)s goods & passengers from it)s mainland to it)s north-eastern states, which is expensive & time consuming as well as inefficient in economic sense. (f !angladesh allows transit, (ndia will re,uire to across only E11km to complete same ob. Tracing the significance of transit, (ndia has re,uested !angladesh to permit them to use &ighway NoI :>, which is from west !engal to north-eastern states via !angladesh. The proposed rout is shown on the above mentioned map along with other countries.

4. :ast e<per!ences about t)e In"o&;angla relat!ons)!p:

(n this context, one ought to go back a bit into history to put the matter in perspective to address the issue more ob ectively, driven by the head rather than the heart and see if we
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

can put it into purely economic terms. Transit rights through !angladesh, for (ndia in particular, have remained a contentious issue since restoration in 9720 of a bilateral trade and transit protocol, which was suspended by the /akistan authorities following the (ndo/akistan war of 97E>. $lthough the protocol has been renewed by both parties every two years since 9720, the two countries have not come to an agreement to date regarding the section on road and rail transit for (ndia through !angladesh. 9. (ndia was never fair on Haraka issue and water distribution. !angladesh lacked to negotiate as a strong peer. 0. (ndia was not fair negotiating boarder issues, now opposing our oil exploration in the !ay of !angle. B. (t is a kind of strange situationL ?ue to lack of obs and greed, lots of boarder people are engaged in black marketing from both sides. !#6 and !?% are actively connected to it. 3any get killed when their deals go sour. (ndian #ecurity Hilled >11 !angladesh in two years. :. /olicy toward rice and lentils were better than expected, provided some rice below international price. 3any former businessmen hiding money and not importing food stuffs. ( do not know recent (ndian rules about food stuff export. >.(ndia)s policy regarding B !iga is negative. @ith all these issues, we still believe, if we give Transit to (ndia, we will come out as winner. ?iscourses and debates had been going on over the past several decades on (ndia5s re,uest for granting her transit, which is actually corridor facility. The opinions have been overwhelmingly negative recommending its discussion in parliament after the national election when it shall have to be debated and decided because the very nature of the issue concerns the security of this country. They ,uote $rticle 9:>$ of our "onstitution which says that all treaties with foreign countries shall be submitted to the /resident 4who shall cause them to be laid before parliament.4 Eminent columnists have even proposed referendum on the transit issue. $midst a flurry of debates on the issue, foreign secretary Touhid &ossain said on Tuesday that a decision on providing (ndia with transit facility is ,uite unlikely in the official talks in New ?elhi. %elations with (ndia have long been strained for various reasons. Mery often the (ndian !order #ecurity 6orce personnel kill and abduct !angladeshi poor villagers. !#6 men have killed more than :E1 !angladeshis in the past five years. .ver these years, neither $wami ;eague nor !N/ decided on it as it involves critical ,uestions of national security and stability. The !angladesh foreign secretary was hopeful of positive results relating to economy and border. &e said that !angladesh would not give any concession regarding transit but would be willing to discuss strengthening security to tackle the terrorists on both sides of the border. &e also took up issues of reducing trade gap *removal of non-tariff barriers, duty-free access, exporting more products from !angladesh+ border demarcation in remaining E.>kms, unfettered access through Tin !igha corridor, exchange of enclaves, and unsettled territories.
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

There are many other issues for !angladesh to discuss with (ndia such as Talpatti, land transit with Nepal, stoppage of push-in, indiscriminate killings of !angladeshi by (ndian !#6, etc. !ut by keeping the agenda small, !angladesh has done well. 3eetings with limited agenda are more effective. The issue of transit to (ndia is highly sensitive as we may have to go even to referendum and parliamentary discussion to determine the acceptability by the people. 3oreover, the "T8 is not competent to take any final decision on such an issue. (t is true that !angladesh could make ade,uate progress in transit issue after signing of the (ndo-!angladesh Trade $greement on 3arch 0<, 9720 which provided for 4mutually beneficial arrangements, for the use of their waterways, railways and roadways for commerce between the two countries and for passage of goods between two places in one country, through the territory of the other.4 Though agreement of .ctober :, 97<1 had similar proviso for surface connectivity as included in 9720 agreement, successive governments of !angladesh could provide the facility due toI *a+ very sensitive nature of the matter, *b+ taking a decision on an issue that might be seen as providing special dispensation to (ndia, *c+ depriving !angladesh of the benefit of access to enclaves like ?ahagram and $ngorpota on permanent basis, *d+ non-fulfillment of promised sale of half a million tons of rice to !angladesh, and *e+ permanent settlement of sharing 8anges water. %ight from the independence of !angladesh its people were eager to extend concessions to (ndians. !ut for certain acts of (ndia they have become suspicious. The worst act was the 6arakka barrage. !angabandhu5s trust in (ndia was not honored properly. @e are suffering from less supply of 8anges water than committed. !#6 are killing !angladeshis without ade,uate reasons. 3aritime boundaries need to be finalised, issues like Talpatti, demarcation of E.>kms borders, stoppage of push-in, and !angladesh-Nepal and !angladesh-!hutan corridors can be solved without much difficulty. !ut so long as the !angladeshis are skeptical of (ndian motives, no !angladesh government will dare to solve the transit issue. Thus it is up to (ndia whether it settles the issue the ,uickly or allows it to continue to drag on for an indefinite period. (n improving the image of (ndia in !angladesh it appears to be relevant to point out the role of media in (ndia. (t has been observed that the (ndian media is not very friendly toward !angladesh. !efore concluding this analysis, it would be appropriate to say that the governments of !angladesh did not pay due attention in drafting earlier international agreements.

5. :ol!t!cal analys!s of t)e propose" trans!t:

5.1 :ol!t!cal 4!e(s:
Though transit is an economic issue, political relation can not be separated from economic relation. (t has been seen that in most case progression has been from close political relations to the deepening of economic relations. /olitical relationships that are not characteri-ed by mistrust or suspicion allow first steps in economic relationship which would then expand and generate vigorous inter-state economic activities. (n that context, for creating an appropriate political climate, (ndia has to come up with fair and
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

ust proposals to resolve some of the bilateral issues that affect !angladesh people with Nbread and butter issuesK. 6ree trade and transit to (ndia, that politicians do not address. The $wami ;eague government in 9720 had a one-year agreement with (ndia for the 4use of their waterways, railways, and roadways for commerce between the two countries and for passage of goods between two places in one country through the territory of the other.4 The $; government under #heikh &asina in 977E-0119 also agreed to reopen the old !ongaon *(ndia+ and Fessore *!angladesh+ broad gauge railway line closed since the (ndia-/akistan war in 97E>. Earlier, the Ershad government signed a working agreement in 9771 with (ndia to reopen the broad gauge. !egum Gia5s government in 977B made transit facilities conditional on the 6arakka water issue. (n 011E, it again snubbed (ndian plea for transit on grounds of water sharing, national security, and domestic trade protection. 'nless ideas are public and openly discussed and debated, it is difficult for any government or political party to solve national problems in the absence of informed public opinion.

5.2 :ol!t!cs of reg!onal connect!4!ty:

/roblems of connectivity can largely be attributed to the mistrust and suspicion that has been characteristic of (ndo-!angladesh relations since 9722. The military rulers perpetuated anti- (ndia feelings to maintain their regime)s sustainability, resulting in a steady decline in relations between the two countriesC (ndia, which played a significant role in !angladesh)s liberation was portrayed as a security threat. $ cultivated national imagery was created by emphasi-ing Dmotives) for (ndia)s intervention and attention was drawn to several incidents, arguing, that (ndia wanted to exploit !angladesh economically. !angladesh has not demonstrated any willingness to have a mutually beneficial relationship with (ndia. The argument on the issues of trade and transit centres mainly on the fact that it will benefit (ndia as it will enable it to connect to its northeastern region. ?haka)s hostile attitude appears to be bereft of any logic. The issue of regional connectivity is part of the debate on Dsmall state - big state syndrome,) where a smaller country tries to hold on to leverage to maximi-e its advantage. &owever, for !angladesh, this leverage appears to be non-negotiable. The political divisions within the country run along party lines, making the situation more complex. &owever, the current government, which has a large mandate, has shown willingness to take firm economic decisions. (t now needs political vision to overcome the hurdles by encouraging an informed debate on the issue. Even if this creates a congenial atmosphere on the trade front, it will open up new vistas in transit issues, which cannot be divorced from the larger issue of economics. The $wami ;eague *$;+ government assumed power in ?haka in Fanuary 0117. The party is aware that the slogan in its manifesto promising change will not fructify if it does not take prudent economic decisions at a time of global recession. Therefore, it becomes pertinent for the country to integrate itself to the global economy by being part of multilateral arrangements. Therefore, it is not surprising that the government took the decision to oin the $sian &ighway Network and to connect itself to the larger global community. Earlier,
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

!angladesh)s 3inistry of 6oreign $ffairs had suggested that signing up to the $sian &ighway would be an economic and political imperative. Foining the route would help !angladesh to strengthen its much publici-ed N;ook EastK policy and especially its relations with "hina.

5.# +ecur!t!es:
#ecularism and civil-military relations are two themes significant for (ndia)s understanding while handling !angladeshi politics. $ll security issues in !angladesh are monopoli-ed by the army. ';6$ nexus with the army should be probed further. Establishing good relations with the $rmy is in (ndia)s security interest. (nstitutionali-e army-to-army relations between (ndia and !angladesh. 3igration and operational help to insurgent groups in !angladesh are two important concerns for (ndia and should be tackled systematically. There is a problem of perception between the two countries. @hile (ndia perceives !angladesh as an infiltrator, and a safe -one for 3uslim extremism, !angladesh perceives (ndia as a hegemonic, an upper riparian state aggravating flood management problems in !angladesh. $lso, (ndia is perceived as a safe haven for !angladeshi criminals. $ cost benefit analysis in political and economic terms should be made on fencing of (ndian borders as the record shows that fencing has been fairly ineffective in the past years. ?iplomacy with !angladesh can at best be effective at people to people level. (llegal migration related to human trafficking is a significant issue. Trafficking of women and children has been taken up by !N/ earlier, perhaps (ndia could engage !angladesh on such issues.

5.4 +o4ere!gnty:
(f allowed transit within the country, it will be bringing crocodile through digging a canal. .nce transit is given, !angladesh will not be in a position to take it back. (ndia is increasingly becoming powerful. (t will kill !angladeshis with the excuse of being terrorists or drug -dealers, as '# does in "olumbia with its puppet government. (ndia also has super connection with the #uper /ower '#- (srael. (ndia is building war fleets and torpedoes to keep its growing power from $frica up to $ustralia in the (ndian .cean. @ithout the transit, !angladesh)s existence is almost threatened but with transit, like the '#-/ak former friendships, and today)s /akistan, !angladesh will be a breeding ground for anti-'#- (ndian fundamentalism. Never allow transit to (ndiaL

5.5 2onnect!4!ty 4s. secur!ty 7 so4ere!gnty:

"onnectivity between the two neighbors is at present restricted to bus services between ?haka- Holkata and ?haka-Tripura and a train service between Holkata and ?haka, which started on 9: $pril 011<. !oth countries signed the treaty on (nland @ater
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

Transport in 9720, which has facilitated river water transit. This treaty has been renewed periodically by both governments. #ecurity and sovereignty issues have been of paramount concern in !angladesh)s consideration of (ndia)s proposal for transit facilities. $lthough !angladesh has agreed in principle, as per $rticle M of the 0< 3arch 9720 agreement, to extend facilities for the use of its ports, roads and railways for the transportation of goods and passengers to (ndia)s Northeast, there are ma or stumbling blocks in its implementation. $nalysts have been citing security reasons for denying (ndia transit or even transshipment facilities. #ome !angladeshi analysts feel that this is the only tool !angladesh possesses when negotiating with (ndia. $s !angladesh tries to keep the advantage it has over other countries in order to emerge as a ma or connectivity hub, it will lose its significance. .ther options available to (ndia to connect its northeastern region to the larger world would be difficult but not impossible to implement. (n the past few years (ndia has been making an effort to establish various road and rail networks with 3yanmar. (ndia has been providing aid to construct the #ittwe port in 3yanmar, which would emerge as a ma or port for products from the Northeast. (t is trying to construct a road network that would connect the northeastern part of (ndia to Thailand through 3yanmar. !angladesh)s security concerns are unfounded on two counts 6irst, in spite of adverse relations with (ndia, /akistan had granted (ndia transit rights through the territory of East /akistan. This was only stopped after the 97E> war. #econd, !angladeshi analysts who cite "hina-(ndia relations, which if soured would drag !angladesh into a bilateral conflict, should look at the growing trade ties between (ndia and "hina despite unresolved border issues. The politics of transit also play on semantics. "onfusion exists about what a transit facility would entail. 3any believe that transit is synonymous with providing a transport corridor. This is illustrated by the fact that it would connect (ndian territories through !angladesh. The !N/ was not against the transit facility and in the 0119 elections it showed willingness to consider this issue. &owever, many believe that it would benefit (ndia more than it would benefit !angladesh.

6.,conom!c analys!s of t)e propose" trans!t:

6.1 ,conom!c cost:
(ndia plays a ma or role in !angladesh)s trade sector. (n 977E, about 0> percent *approximately+ of total imports *both legal and illegal+ in !angladesh came from (ndia. !angladeshi products constituted only 1.> percent *approximately+ of total (ndian imports. The economic relationship between !angladesh and (ndia has the potential of being mutually beneficial and rewarding. &owever, at present the situation is not one of interdependence but of one-sided dependence on the part of !angladesh. The large bilateral trade deficit that exists in favor of (ndia needs to be reduced before this scenario can be changed. #imilar to (ndia)s denial of transit facilities to Nepal and !hutan, !angladesh has long denied (ndia overland transit facilities, which would significantly reduce costs of transporting goods to (ndia)s North Eastern states. &owever, now that (ndia has acceded transit to Nepal and !hutan, it is time to rethink O alongside a number of other issues O the issue of comprehensive transit for and through other nations as well.
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

6.2 .ra"e "ef!c!t:

(ndia)s informal and formal exports to !angladesh stand at around A> billion dollars while !angladesh)s exports are about A B>< million during the financial year of 0112-1<. (t is ,uite true that (ndia)s economy is large and there could be a reasonable si-e of trade deficit with (ndia. The deficit is so large that people are concerned that (ndia should do something to reduce the gap. .therwise it may be perceived by ma ority of people in !angladesh, rightly or wrongly, as Neconomic exploitationK of !angladesh by (ndia. #uch perception is not politically healthy for bilateral relations.

6.# ,conom!c benef!t:

4The great rule of conduct for us in regard to foreign nations is, in extending our commercial relations, to have with them as little political connection as possible.4 -- 8eorge @ashington. 4Transit issues have long been a sub ect of debate, but we think the issue should be looked at from a business and economic point of view rather than a political one,4 At!ur *governor, !ank of !angladesh+ said at the close of a two-day seminar on regional integration.K @e must consider investment and commerce. The issue can be looked at positively if our economy benefits by providing transit facilities to our neighbors,4.&ow can !angladesh harvest the benefit as the transit point for the upcoming economic superpower of the world. (n economic terms, becoming a transit point would do a lot to promote economic activities if !angladesh can add value to the !angladeshi goods as well as helping to generate employment. The gain of !angladesh can be manifolds. &ow !angladesh can become a regional transport hub, was described by $?! "ountry ?irector &ua ?u in a seminar recently. #he mentioned - NJou can benefit tremendously through opening up transit and great opportunities for crossing from east to west and giving the land-locked neighbors access to the seaN. The "hittagong port can become a modern busy port like #ingapore serving the #$$%" countries and even "hina. &uge foreign investment may be attracted to !angladesh and finally a throbbing service sector like banks, insurance, hotels, rest houses, petrol pumps etc. may develop around the Trans continental roads and railways. There is an estimate of direct economic gain from transit fees. (t ranges from >11 crore taka to :,EEE crore taka. The last but not the least, is the mutual transit. !angladesh, in return, will get a much shorter route to "hina, which already is its second largest trading partner. 'nfortunately, most of the trading now-a-days takes place through sea-route. The cost of import increases, as well as !angladeshi goods loose competitiveness in "hinese market. (f !angladesh wants to access #outh "hinese underdeveloped market, they must go through (ndia. This was a point of concern for the "hinese
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

delegates during Hunming initiative in 9777, an initiative to link "hinese province of Junan with #even #isters of (ndia, 3yanmar, Thailand and !angladesh. (ndia needs to balance the security and economic e,uations with !angladesh. The /rotocol on (nland @ater Transit and Trade, signed in 9720, should be revisited. (ndia does not need to negotiate with !angladesh on these issues. (mplementation of the agreements should be the main focus. @ater issues are the central concern for the &asina government. (ndia should focus on this issue. 6ocus on de-silting and dredging of river waters along with management of water resources should be the key focus. @ater is one issue that can be ointly taken up by both governments. Foint management of water resources is therefore extremely important. !us services should be made regular and Holkata-?haka-$gartala uninterrupted bus service should be made operational. %ail transit should focus on making beneficial rail agreements. %ails are the biggest strength of the (ndian economy. (n fact, rail transit can never be effective unless we moderni-e !angladesh)s railways. (ndia should offer a package including training programmes as !angladesh railways are keen in cooperating with (ndia on the issue. (ssue of waster resources should be solved. $ main problem is that (ndia considers the !rahmaputra basin as one, whereas !angladesh demands that there should be three different basins of 8anga, 3eghna and !rahmaputra. Examine multilateral solutions. @ater problems in !angladesh are inevitably linked to the issue of "limate "hange. (nstead of taking issues bilaterally, regional focus should be brought in, where (ndia, !hutan and Nepal could ointly benefit from the exercise.

%..rans!t !n4ol4es bot) econom!cs an" pol!t!cs:

$ctually transit is not only an economic issue but also a political issue. (n this sense, the government of our country should allow transit wisely. !ecause once the transit is allowed to (ndia by !angladesh, it will not be in a position to take it back. (ndia is emerging as a powerful economic force, besides its expanding political clout. (t is also building war fleets to maintain its growing presence in the (ndian ocean up to $frica. (ndia needs transit facilities via !angladesh territories for its own national interests. !angladesh will, no doubt, en oy some economic gains by offering the same. !ut the ,uestion that comes here is whether transit is only a bilateral economic issue to the exclusion of the needs for promoting wider regional connectivity. (f it is a bilateral issue, then the focus should also be placed and certainly in no 5secondary5 way, on resolving all other bilateral issues with (ndia. !angladesh has yet many unresolved bilateral problems with (ndia and all concerned do know what these are. @ithout (ndia taking a strong proactive move to resolve such issues through actions and not words, the granting of the transit will have reasons to fuel suspicions and misunderstanding about (ndia5s goals and ob ectives. (f transit is given unilaterally to (ndia, it will become a politically charged
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

issue in !angladesh. (t will then tend to encourage here the extremists5 of all sorts, besides causing others to raise some concern in one way or other. 6rom the (ndian perspectives, it is not difficult for anyone concerned to understand or appreciate the situation about transit. @ithout the transit, it will be somewhat difficult to address the problems, some of which have been getting rougher and tougher for (ndia in eight north east (ndian 5states5. $lso these (ndian states will then, someway or other, have to depend on !angladesh for manufactured goods. !ut with the transit, (ndia can sell its own products to the region and, in that event, !angladesh would lose a potential market. (ndia does not want to allow !angladesh land-routes for its trade with and Nepal and !hutan. !esides other things, (ndia thinks such a facility to !angladesh could endanger (ndian security. &ow then can !angladesh allow transit facilities to (ndia without considering other issuesP !angladesh would not know what goods (ndia would be sending to the troubled northeast, if the transit is allowed. (ndia could use it to step up its counter-insurgency operation in its north-east. (t could then draw !angladesh into an uncomfortable situation. (n the process, !angladesh could become the target of both (ndia and the insurgent groups. (t would mean increased security problems for !angladesh. $ccording to officials, on $ugust 01, 0112 New ?elhi gave to ?haka a draft deal on transit for five years, to cover the movement of passenger and cargo. (n the draft, New ?elhi proposed allowing (ndian vehicles carrying goods and container cargoes to enter !angladesh at !enapole land port for going to the (ndian provinces of 3eghalaya, Tripura and 3i-oram through the !angladesh border points of Tamabil, !ibirba-ar an Hhagrachhari. ?espite mounting pressure from New ?elhi, !angladesh did not allow (ndia the transit for lack of infrastructure and logistics, absence of in-depth assessment of possible economic gains from it and its internal security implications. (n its latest proposal, New ?elhi tacitly avoided using the word 5transit,5 considering political sensitivity in !angladesh. @hatever the wording may be, the draft, if finally endorsed, would de facto mean allowing transit for (ndia, according to informed circles. (n this backdrop, it has to be appreciated by all concerned that 5transit5, in the way the proposal has come from (ndia, is not merely an economic proposition. (t has political implications as well. 6urthermore, it is to be noted here that the road infrastructures in !angladesh on ma or sections of the related network are already under strains, not being in position to ensure smooth flow of traffic, inclusive of passengers and cargo. (f 5transit5 is given under such circumstances to (ndia, the !angladeshi businesses will have to pay a heavy price for reasons of congestion, am, delays and other related problems for transporting their own merchandise within the country, thereby raising their costs of doing business.

$. .)e potent!al "amages ;angla"es) coul" suffer:

9. The corridor through !angladesh could increase (ndian (ntelligence #ervice activities in !angladesh.
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

0. (t could lead to spreading of $(?# and could become a potential route for drugtrafficking. B. The road and ports of !angladesh could get overcrowded, thus resulting in poor efficiency in domestic industries. Heeping in view the benefits, it seems the above mentioned risks are too small, from economic perspective. !ut, a country is not made up of its economy only, it has its political, ideological and popular faces also. To sum up the whole condition, !angladesh currently does not allow (ndia the transit because of non-economic reasons.

9. .rans!t & /o( In"!a ga!ns out of !t:

The main gainer of this whole process would be the people of North-East of (ndia. %ight now, anything produced in that region can not be marketed in the rest of (ndia, due to the distance from port *Holkata+. 6rom past decade, (ndia is becoming more dependent on foreign and private investments in growth picture. !ut, no company will want to invest in this remote corner of the Northeast, because of the logistical problems of #evens #isters linking in with the rest of (ndia. #o the only real economic future of Northeast lies in reopening its route through !angladesh to its @est and with 3yanmar and #outh-East $sia to the East. 6or additional benefit, if they are allowed to use a !angladesh port, the export oriented business can also come up in this region. The region is rich in energy resources, like natural gas and hydro-electricity. The economic progress in this region can stop a long-standing grievance and insurgency resulted.

10. =)at s)oul" be tra"e&off for trans!t:

8iving something to (ndia would never bring the e,ual back to !angladesh. !angladesh may think about giving Transit facilities to (ndia, if (ndia agreesI *9+ 8iving Nepal its 90Q9: miles territory for transit facility with !angladesh *0+ 8iving !angladesh the water *no bullshit anymore+ *B+ %esolving the #itmahals, Talpotti, and other similar issues. *:+ #top supporting the dalals in !angladesh. $N? -------now we know who is the real traitor, and want to give (ndia the Transit facilities without resolving the basic problems that serves the greater interests for !angladesh "ountry5s leading trade experts, economists and businessmen express their views in support of providing transit facilities to (ndia. The business leaders also suggest carving out a comprehensive package deal with (ndia, involving all bilateral problems including water and trade deficit issues while resolving the transit issue. $ccording to the experts, a country cannot advance while staying isolated from the international community. The government at a ministry-level bilateral meeting last 6riday opposed an (ndian proposal
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

for transit facility raised by (ndian #tate 3inister for "ommerce Fairam %amesh. #ome business leaders, however, foresee negative impacts on local industries from the transit and favoured it in a controlled manner to earn foreign currency as royalty. Ha-i Hhali,u--aman, president of !angladesh Economic $ssociation *!E$+, extends his support for giving (ndia transit as 4connectivity is a must for the modern one world era4. 4@e did not sign the $sian &ighway Ragreement andS we have missed some opportunity of connectivity,4 he says. 4!ut the transit deal should be under a package, involving water, economy and trade issues to force more business and economic relation with the big neighbour,4 he adds. "ooperation is a matter of give-and-take and one has to give something if one demands something from the other, Hhali,u--aman says. To 3ir Nasir &ossain, president of 6ederation of !angladesh "hambers of "ommerce and (ndustry *6!""+, transit is a very sensitive issue. The government should consider it carefully as such transit may create negative impact on the local industries. 4(f transit is given to (ndia, the existing business interest of !angladesh with the northeastern states of (ndia will be hampered. @e currently export some toiletries, beverage and food items to these states. (f the government approves a transit, it will make the (ndian products cheaper than the !angladeshi products Rin those statesS,4 3ir Nasir argues. !ut a package deal involving all other bilateral and economical issues, including the transit, between the two countries can be considered as a tool for realising other interests of the country, he says. The government should first set a modality, linking all bilateral problems under the deal before going for a transit facility, he adds. The (ndian proposal is not a transit facilityC it is a 4corridor facility4 which is internationally discouraged, 3ir Nasir opines. $ transit means connecting two countries through a third country, but (ndia is proposing a link from one of its states to another via !angladesh, he explains. ;atifur %ahman, president of 3etropolitan "hamber of "ommerce and (ndustry *3""(+, says !angladesh has to first ensure preferential or duty-free access of its products to (ndia to narrow down the existing trade deficit before opening a discussion on the transit issue. 4The sub ect can be discussed in a comprehensive manner together with the entire gamut of trade relations to come to a mutual solution,4 ;atifur says. $ccording to Tipu 3unshi, president of !angladesh 8arment 3anufacturers and Exporters $ssociation *!83E$+, transit should not be a problem between two neighbouring countries and !angladesh can open a transit for (ndia through discussion. !angladesh can also discuss with Nepal and other #outh $sian countries for connecting each other through transit facility. !ut the government should weigh its own interest before allowing a transit, he says. 3$ 3omen, president of ?haka "hamber of "ommerce and (ndustry *?""(+, says the country should maintain more caution in allowing (ndia a transit as !angladesh is yet to build necessary capacity to handle it. #uch transit can be approved if (ndia includes all bilateral problems under a single package deal, he says. 4@hen the #outh $sian nations phase out tariff from their chosen products transit facilities should naturally follow to make the #outh $sian 6ree Trade $greement *#afta+ fruitful,4 he adds. $llowing a transit must help increase bilateral trade and the economy will be vibrant with the enhanced export-import activities between the two countries, he says. !angladesh should give access opportunity to (ndia in economic way, if (ndia gives access power into herself to Nepal and !hutan. it will be rational demand for !angladeshi that time i think that opposition party and other counter groups will under reality because
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

the treaty of interest .3oreover, if (ndia impedes to allow access opportunity to !angladesh to communicate and business with Nepal and !hutan ,it is easy that we will block our transit .now is ,uestion (ndia may have not only economic aspects but also military perspective on the issue of transit such as to suppress north east extremist groups .if we see and observe military strategy in south $sia so we can easily reali-e outside power do not attack our country .if !angladesh allow such transit it can be harmful in national stability and security those are important than economy. when one country has no security money can not help him or her it is actually sub ective matter .!ut we should allow where we have maximum opportunity and minimum opportunity cost .( want to say that 8ovt is transient but national interest and the profit of people is always with country. @hether one govt allow such issue that is vulnerable and long time affect for country ,i think we ought to disallow such sign .we know that govt is transient but country is forever.issue that is vulnerable and long time affect for country, i think we ought to disallow such sign .we know that govt is transient but country is forever.

11. >!n"!ngs an" suggest!ons:

@hy !angladesh should never allow transit to (ndia. &ere are the reasonsI 9. (ndia has proven itself as an untrustworthy friend. ?uring the liberation war, while helping !angladesh liberation, it secretly built the 6arakka dam. N6arakka was commissioned on permission from 3u ib on the condition that it will have test run for only :1 days. !ut unfortunately those :1 days is yet to be finished *even after B2 years+ and !angladesh is getting the pinch of dry rivers. 6urther >: other international waters were stopped by the friend of !$; making barrageQdamsQ groins virtually making lower riparian country !angladesh)s rivers dry.K ?uring 3u ib time, the %akkhi !ahini head was made an (ndian. The ute head ,uarter was transferred to ?elhi. @ith the 3u ib -(ndira /act, river demarcation based on the mid current was made a farce. !angladesh is losing land. (t is now a serious problem. 3u ib was persuaded to hand over the sovereignty of N!E%'!$%(K in return of NTin !igha.K!ut Tin !igha was never returned. $ !erline wall was built in !engal to so-called stop !angladeshis cross the border. (ndia ammed the !angladesh TM. $s a matter of target practice, (ndia regularly kills !angladeshi oans in the border region. Even before the investigation, (ndia blames !angladesh for terrorist actions within its borders. 0. @ithout the transit, (ndia)s seven non (ndian sisters in the North East that now depend on !angladesh for manufactured goods, but with transit, (ndia will sell its own product to the region and !angladesh will lose. B. (ndia doesn)t want to allow !angladesh to have land route with Nepal and !hutan which is purely for trade purpose, (ndia shows the excuse that it goes against its territorial integrity, using the same logic !angladesh can not allow transit. :. 6inancial benefit from transit fees would outweigh its other disadvantages. !angladesh would risk destroying its own roads and highways, infect its citi-ens $(?#. %oads and highways will be neglected by the chauvinistic (ndian traders and military personnel are passing through !angladesh)s heartland. >. (ndia is an unreliable keeper of promises. (t failed to keep up to the signed treaties of !arubariQ 6arakka. (ndia first fix these problems than only trust building will lead to
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

transit.. %$@ fed (ndian chauvinistic government will never go for a fair deal because its sole purpose is to help !angladesh into a failed state. E. Transit through !angladesh will allow (ndia to increase its repression in its occupied North East. 6or such repression, !angladesh suffered in the hand of /akistan and now as a peace-loving country, it shouldn)t allow (ndia to increase its repression over its non &indiQ largely $sianQ "hristian and !uddhist minority people unfortunately made part of (ndia. $t the same time such a deal would make (ndian separatists rebels make !angladesh a target. 2. (ndian treaties are politically motivated. @hile 3u ib signed the 3u ib-(ndra Treaty 0> year treaty results in the beginning of trade deficit, water shortage, border issues dispute, and dependence on (ndia resulting in the (ndia friendly 3u ib)s unpopularity and within a short period of time made !angladesh bankrupt, Nthe bottomless basket caseK and brought his own death. (f the past experience with (ndia is a guide, it is believed that people in favor of transit to (ndia are the ignorant (ndia- lovers popularly known in !angladesh as the N(ndian %a-akarsK who are inviting trouble for !angladesh. 6or such an issue we suggest for a national referendum. (f people decide, let it be, if not, neverL

12. 2onclus!on:
Transit should be mutually beneficial for both countries. (n this relation (ndia should come up with sincerity and fairness to resolve the long-standing aforesaid bilateral issues. There is a view that dealing a single bilateral issue separately with (ndia does not make sense because all pending issues are inter-linked and affect directly people in !angladesh. !angladesh needs to negotiate on a package of issues with (ndia for settlement. (f this is done, it will be much easier for present government to carry people with her to strengthen relations with (ndia, such as opening transit for northeastern states of (ndia to "hittagong port and in cooperating with (ndia on security matters. There is no ade,uate reason why bilateral issues cannot be settled with fairness between the two neighboring countries. Time has come to put behind negative mind-set so that both countries can make progress and prosperity for peoples of the two countries. (ndia needs !angladesh as much as !angladesh needs (ndia. &aving a multilateral transit framework would help the region in that it would facilitate trade. Transit and communication will not be sufficient to deal with the issue of connectivity and any such initiative has to be complimented by facilitation by the customs authorities and by improvements in the road network. ?eveloping "hittagong, 3ongla, &aldia and Holkata ports would be a ma or step towards facilitating trade. The security centric debate on connectivity has made it extremely difficult for the two countries. !angladesh needs to take the broader picture into account. Even though both countries conducted a dry run in 6ebruary 0111, to see whether transshipment would solve the issue of transit, it is yet to be implemented. This dry run demonstrated that transshipment would be economically beneficial to !angladeshi lorry drivers as well as to the two countries. !oth !angladesh and (ndia have been trying to take the initiative in order to improve trade between the two countries. $lthough the balance of payments *!./+ is heavily in favor of (ndia, the two countries can try various means to improve trade. /roviding transit facilities would also help !angladesh to improve the !./ situation with (ndia as well as expanding trade baskets to include more products from !angladesh. !angladesh needs to play a leading role in facilitating
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

connectivity. (n fact, this is one area in which !angladesh can play a greater regional role. !eing the founder country of #$$%", which has paved the way for greater cooperation within the region, !angladesh again needs to assume a leadership role. $s a burning issue, intellectuals & politicians etc focus transit issue from multidimensional view points. #ome of them emphasis on security & political instability etc. .ther concentrate on sovereignty etc. #o there are serious security issues that are associated with the transit that must be brought into consideration in any future negotiation, and if there are economic dividends that we can derive that are positively proportional to the investment, so much the better. 6inally recalling the argument of 8eorge @ashington (the
great rule of conduct for us in regard to foreign nations is, in extending our commercial relations, to have with them as little political connection as possible) ,we conclude that transit would be beneficial if

we go ahead considering aforesaid bilateral issues, security, sovereignty, relative gains & loses etc.

1#. 'eferences:
+matya" , - " ,rof, ?evelopment and "ooperation in #outh $sia, /olitical #cience $ssociation of Nepal, $nnual Fournal, Mol.B, 977:. Baral Lok Raj, #$$%"I /roblem of !ecoming a "ommunity, The %egional /aradox, $droit /ublishers, Jamuna Mihar, ?elhi, 0111. Gautam pendra, Ed., #outh $sia and "hina Towards (nter-%egional "ooperation, "hina #tudy "enter, Hathmandu, 3arch 011B. !aleiro .duardo, #outh $sia Economic "ooperation *synopsis of the speech+, Hathmandu, Fune 02, 011B /erma Bharat, #trategy for (ncremental (nfluence in $sia, httpIQQwww.bharatrekshak. comQ3.N(T.%Q(##'E#>-:Qverma.html National News $gency, Nepal 6or %egional &armony, Hathmandu, Fuly 07, 011B /eople5s %eview, ?eclaration .n /rinciples for %elations and "omprehensive "ooperation !etween the /eople5s %epublic of "hina and the %epublic of (ndia, Hathmandu, Thursday, Fuly B-7, 011B. Fha Heshab %a , #ecurity of #mall #tates. 0hen -ai1eng *#enior %esearch fellow, "((#+, #outh $sia5s /eace and stability "onform to "hina5s (nterest, $ugust, 0110. 6rank de #ilva, /eace and #ecurity in #outh $siaI /erspectives from the %egion, (nternational "onference on /eace and #ecurity in #outh $sia, (nstitute of #trategic #tudies, (slamabad, /akistan, #eptember 97-01, 0110. 3ohanty, 3anoran an, /rof., "hina and #outh $sia in the /ost-#ept.99 @rold, $ paper presented at the seminar on #$$%" and "hina, HathmanduI "hina #tudy "enter, 0B ?ecember 0110. Ma 2iali, %elations between "hina $nd #$$%", $ paper presented at the seminar on #$$%" and "hina, HathmanduI "hina #tudy "enter, 0B ?ecember 0110. !rigadier 8eneral 3. #akhawat &ussain *retired+, #ecurity and "ooperation in #outh
'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco

$sia-!angladesh /erspective, $ paper presented at the seminar on #ecurity and "ooperation in #outh $sia, Hathmandu, $ugust E-2, 011B. F.N. ?ixit ed., 6oreign $ffairsI "ross !order %elations4, %oli /ublication, New ?elhi, 011B Nepal for %egional &armony, National News $gency, Hathmandu, Fuly 07, 011B Nepal5s 6oreign /olicyI (ssues and .ptions, (nstitute of 6oreign $ffairs, Hathmandu, 9777 3.%. Fosse, Nepal5s Tuest for #ecurityI Then and Now ;essons for #outh $sia too, #eminar on #ecurity and "ooperation in #outh $sia, Hathmandu, $ugust E-2, 011B 3ishra, Tirtha /., Nepal and Trans-&imalayan TradeI $ !rief #urvey, 6riendship, vol.9., %a bhandari, "hakra ?as., $n .verview of Nepal-"hina Trade & Foint Menture, 6riendship, Mol. 9., No.9, "hina #tudy "enter, Hathmandu, 3arch, 0111. $dhikari /ushpa %a ., Nepal "hina %elations in a "hanged 8lobal "ontext *9771-0191+

'e"(an A)me", *.+.+, ,conom!cs, +-+.. /ello: 0$$01%16$11466. ,& ma!l:re"1eco1ya)oo.com.+kypee:re"1eco