Dr Mujibur Rahman is former chairman of Bangladesh's Tariff Commission and former Chief Executive Officer of the Foreign Trade Institute. India recently was granted permission to use Chittagong Port and Mongla Port to transport its goods. This will facilitate India to transport its goods from its mainland to its northeastern states. An expert on these issues, Mujibur Rahman talks to Prothom Alo about the overall issue of transit and transshipment agreements between Bangladesh and India.
The government has granted India permission to use Chattogram and Khulna ports. What will Bangladesh receive in return?
I am glad that transit has finally started. South Asia is the only region in the world where there are no facilities for the free movement of cargo, services and people. These facilities exist in Europe, North America, South America and even among Southeast Asian countries. We have communication by air and waterways in the region, but not by road or railway. We are not connected with Myanmar, Nepal or Bhutan. Nor are we connected with India or China. A bit further on, we are not connected with Pakistan or Afghanistan either.
There is a historical backdrop to this.
There is a historical backdrop in Europe too. The conflict among those countries was even worse. There will be wars. Amid this, the movement of people and cargo will continue. In this region, there was free movement up until the 1965 India-Pakistan war. This halt in movement has been a loss for the economy and the people. No one has stood to gain. Everyone benefits from connectivity. As for who stands to benefit the most, that depends on the efficiency of the concerned countries, manufacturing and quality maintenance of products, and capacity for export. It does not depend on the size of the country.
Another thing is, if I take Bangladesh as the centre, then its radius can spread from Visakhapatnam out to Nepal, Bhutan, Myanmar and on to China. Bangladesh is an ideal location for transit. The other seaports nearby are not like Bangladesh. If we can astutely and skillfully utilise this, we will stand to gain hugely. Switzerland uses such an advantage in Europe. I am in favour of the Swiss transit model. They earn over one billion dollars a year just through transit.
How much does Bangladesh stand to gain at the moment?
With transit facilities of Chittagong Port and Mongla Port being granted to India, it is India that stands to gain more at present. Bangladesh will gain less. We must keep in mind that Mongla Port has not been developed that much. And it is not possible to use the development that has been done. It is not enough just to develop a port, it has to be used.
Again, despite its capacity, Chittagong Port often faces a shipping jam due to weak management. The studies of various organisations indicate that this port is not being used to its full capacity. Even I studied the matter when I was in the tariff commission, and found the vessel jams were caused by administrative and management inefficiencies and corruption.
Initially it may seem that India is benefitting more by transit and Bangladesh less. But once transit starts in full swing, Bangladesh will gain much more, even more than Singapore. We are well aware of Singapore's condition in the seventies. Now it is a transit hub. If Bangladesh becomes a transit hub too, trade and commerce will increase manifold. The question is whether we want to take future Bangladesh to that point.
Another point to note is that the transit at present is very limited. Integrated measures are required to get full benefit from transit.
You speak about integrated steps for transit. Is this reflected in the agreement that has been signed?
The NBR circular that I saw is only a part. Circulars will also come from the roads department and the port. Then there is the matter of security. I would say these are just baby steps. As the matter progresses, it will grow strong. I submitted a report to the government in 2012. Had they taken that report into cognizance, it would have been better. The matter would have been better if there had been more preparation.
That means they didn't fully take the Tariff Commission's report into cognizance?
They failed to see the magnitude of transit. This is not any scattered matter, it must be integrated. It must have a monitoring and management system. The various agencies involved with put forward their calculations and assessment. But there needs to be an authority to join the missing links together. Who will settle any contentious issue that may arise? That is why the authority must be strong. We need to study models of various regions and adopt the one that is most suitable. And we must put our experience into use too.
The public perception is that India was granted the use of Chittagong Port and Mongla Port simply because they wanted it. Yet Bangladesh is not getting what it wanted, that is, motor vehicle movement from one country to another under BBIN.
I would stay the journey has just started. We will next get such transit facilitated with Nepal and Bhutan too. Our vehicles will travel over India to Nepal. The manner in which Indian businesspersons are sending goods from the Indian mainland to the northeast states, they themselves will call for an extension of these transit facilities. After all, the Kolkata isn't very conveniently located. They will put pressure on their government to use Chittagong and Mongla ports. It is not just that the Indian government wanted transit that it came through. We need the revenue too. If we can increase the capacity of Chittagong Port further, we can send goods to Myanmar and China too from here.
Transit from Chittagong and Mongla ports is in full swing. Is there scope anymore to take up a new model?
Why not? Transit is a continuous process. It can be developed and renewed in phases. The government can form an expert committee for the purpose. They will hold meetings to discuss solutions to any problems that crop up in transit. There needs to be an authority that can settle disputes. What goods are to be transported, which route is to be used, what vehicles will run, all such details must be specified. Once things go into operation, problems can crop up. For example, tariff this side is to be paid in Bangladeshi taka. Where will an Indian businessperson get Bangladeshi taka? They will have to pay in Indian currency or in dollars. The NBR circular has no clear mention of these matters.
Many experts are of the opinion that the tariff rates fixed for transit are unfair and inadequate. Have environmental costs, road wear and tear, etc, been taken into consideration?
According to WTO, after calculating all transit costs, the country providing transit can keep a 25 per cent margin. The use of the road is most important here. From what I see in the newspapers, the amount fixed by NBR is inadequate. It is Tk 1.85 per km. Tariff should be fixed taking into consideration the road infrastructure, land acquisition, etc. It should be over Tk 3.50 according to our calculations.
India will save a lot financially by using the Chattogram and Mongla ports. Experts feel Bangladesh could get a part of that. What do you think?
As I said, even after covering all costs, the country providing transit can keep a 25 per cent tariff margin. That is why I provided an arithmetic model. It is not difficult at all to make these calculations. Even if not implemented right away, the complete transit which we spoke of can be implemented in phases.
It is said that India doesn't want to give Bangladesh transit through Siliguri, known as the Chicken Neck, because then Nepal and Bhutan won't use the Kolkata port. What do you say about this?
That would be most unscientific. According to international law and the UN Charter, Nepal has the right. A landlocked country has the right to use the route most convenient for it. India cannot stop this even if it wants to.
A few years ago India stopped transit with Nepal due to the Madhesi movement along the India-Nepal border. Nepal faces severe consequences. India's neighbours have such problems with India. For example, we do not receive the amount of water from India which we should as a downstream country.
Bangladesh is endeavouring to address these problems. After contention for many years over the maritime boundary, we finally went for international arbitration and received a verdict in our favour. We must try for our fair share of water in the same manner. The UN has a protocol regarding rivers, though both the countries must be signatories of the protocol. If a solution cannot be reached through bilateral negotiations, we will have to go to international court for our share of water. That is our right.
But what does reality say. It has been 51 years, how much more do we have to endeavour?
There are many examples all over the world where such problems persist for far longer than 51 years. How long has the Ukraine or Taiwan problem been going on? Aren't they displaying patience? They have various forces behind them. We don't. That is why we will have to be even more patient.
You see a bright future in transit, but why not the same optimism with water?
It is not that transit involves the interests of India and Bangladesh only. The businessmen of the two countries are the bigger stakeholders here. They create pressure on the governments of the two countries. The people of the two countries also create pressure. But it is different about water. As less water flows through the rivers now, it has become an issue pertaining to election politics in India. The treaty was almost finalised in 2011. But it fell through at the last moment due to objection from Mamata Banerjee. India is looking at its own interests, not considering the interests of the downstream country. But I think change will come about here too if China decides to implement the plan to divert the waters of Brahmaputra. With India then facing damage, it will have to think anew about rivers. They will listen to us.
There was a big opportunity to use transit as leverage to get our share of water. Have we lost that chance?
Yes, it is true that there had been an opportunity. It had been decided that a protocol on Teesta and transit would be signed together during the 2011 meeting between Sheikh Hasina and Manmohan Singh. The protocol had even been prepared. I was there at the time. But as Mamata Banerjee was absent, the protocol was not signed. You may then say, they did not give us Teesta waters, so we won't give them transit. That would mean a loss for both sides. Another thing may be that when most of the businesspersons become used to using the transit from India's West Bengal to its northeast, they will say that the water should be given. A relationship is not one-sided. Both sides must come forward.
It seems to all depend on India's wishes and whims, doesn't it?
India is our largest neighbour. We depend on India's cotton, onions and much more. We can't overcome this overnight. We must keep good relations with big neighbours.
Are we being able to drive a fair bargain?
We are driving a bargain, but then again, we repeatedly speak about our helplessness. In every meeting with India, the Teesta issue is raised, even if it's not on the agenda. This must continue.
Transit is being implemented now. But is there any security threat?
Given the experience of transit worldwide, transit has not posed as a security threat till now. There is transit between the GMS countries which include conflicting countries. There hasn't been any security problem there. Neither has there been in Africa.
Many countries are a part of those transit networks. Here it involves just two countries.
Transit here may have started between just two countries, but we hadn't envisaged transit for just two countries. We had thought of it on the BBIN context. We have even considered it in context of the BIMSTEC countries. We have thought of it linking with Myanmar and China too.
In the matter of bilateral relations, the general perception is that if India wants something, it happens. If it does not want it, it doesn't happen. How to emerge from this situation?
In the world, many things happen if America wants. And don't happen if America doesn't want. The same is said about China. India is America's ally and has adverse relations with China. They have intermittent border skirmishes. But that doesn't means trade and commerce has halted between the two countries. The Shanghai Cooperation Council meeting is being held in Goa, India. Despite the adversity, China has one trillion dollar trade with India. This amount is scaling up every year. There will be invariably friction with neighbour countries and so we need to boost our capacity.
At one time we were given to believe that Bangladesh would become like Singapore with the revenue received from granting India transit. Transit has been granted, tariff and all sorts of fees have been fixed. How does reality stand?
Singapore was so poor that at one time Malaysia ousted it from the confederation. Singapore doesn't even have any sort of mineral or natural resources. Yet they are now one of the richest countries in the world. The manner in which Chittagong Port is being developed, if all this can be maintained efficiently, then Bangladesh can become a transportation hub like Singapore too. Transit can play a vital role. India will develop its northeast and that will have an impact on Bangladesh. After all, they will have to use this route. If there is transit simultaneously through road, railway and river routes, Bangladesh can earn a few hundred million dollars annually. We may see that very soon. If we follow other ideal multimodal transit models of the world, this region will one day be the growth hub of the entire Asia, with Bangladesh at the centre.
Thank you
Thank you too