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28 September 2011, Gateway House

India-Bangladesh: Energy has to be the driver

Shortly after Prime Minister Manmohan Singh’s visit to Dhaka, Gateway House interviewed the Bangladeshi High Commissioner to India, Tariq Ahmad Karim, who commented on the prospects of enhanced relations between the two nations, and the opportunities that lie ahead.

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India’s Prime Minister Manmohan Singh made a long-overdue, much-anticipated trip to Dhaka on September 6. But West Bengal Chief Minister Mamata Banerjee’s decision to repudiate the interim Teesta and Feni water-sharing agreement undercut the larger national interest of building a relationship of greater trust with Bangladesh. The Bangladesh government, on its part, reacted maturely and turned the visit into success and a major step forward for India-Bangladesh relations.

Gateway House’s Hari Seshasayee interviewed Tariq Ahmad Karim, the High Commissioner of Bangladesh to India, to discuss the implications of the agreements signed during the visit, and the long-term vision for the two neighbours.

India and Bangladesh have conventionally invested and traded in sectors such as textiles and technology, but new initiatives like power (the thermal power plant at Khulna, for example) and other sectors like automobiles or pharmaceuticals have immense potential. What in your opinion should we focus on?

A major area for us is power generation. Thermal power, based on coal or hydro carbons, is just one part. Gas is another. The exploration of gas is significant because our estimated reserves are not sufficient to meet our needs. We currently switch between power and fertilizer plants, and even export fertilizers to India. To set up more power plants, we need to find more gas fields – perhaps this is an area where India can take a chunk of the exploration market.

Bangladesh has ambitious growth plans, and we want to lift many people out of poverty. To do that, we have to create jobs, our industries need to expand and the economy must grow faster. To do this, you need power: without energy, you cannot fuel development plans. It’s like a car without petrol – it will go nowhere without gas. Energy has to be the driver. So we’re back to power.

Presently, the energy plan is a short-term one – even with the 1,320 megawatts (MW) plant in Khulna, we would still be short by 1,000-2,000MWs of power. A medium and long-term plan must also be formulated. Instead of trying to meet deficits, we must reach a stage where we have plenty of power, and can direct it to essential industries.

This requires ample cooperation and sub-regional support as well. Take India’s deal with Bhutan for instance: while Bhutan’s total power demand is approximately 700 MW, the potential capacity for generation is over 23,000MW. In the first phase alone, India is to generate 10,000MW. And Bangladesh has expressed an interest in tapping into the remaining 13,000MW – at least some of it, if not all.

For this long-term vision of energy security and enhanced bilateral relations, is there a specific role that India’s North-East can play?

Yes, the North-East can play a significant role in setting up hydroelectricity power generation – specifically in Arunachal Pradesh, Sikkim and Mizoram.

Mizoram has the potential for small-scale hydroelectricity generation, while Sikkim’s potential is even larger. In its next phase, Sikkim plans to produce 3,000MW of power, and Bangladesh is interested in acquiring 500-1,000MW of that, which we invest back into India’s power industry. It’s a win-win situation – Sikkim benefits, Bangladesh benefits.

Ultimately, India’s national grid line benefits, since we have agreed in principle to hook-up our grid lines. In five to ten years, India and Bangladesh will have active exchanges and trading of power.

The North-East is highly valuable for another reason: if you have goods, you must also have a large market to sell the goods. For Bangladesh, the biggest market is right next door – India. But to allocate this linkage, good connectivity is essential. This will enable constant exchanges and trade across our borders, allowing people to rediscover each other.

After all, the North-East was one of the richest areas before partition, and its GDP-per-capita was higher than many places in India – today, it is one of the lowest because the region became starved of economic development. Due to alienation, neglect, and other factors that influenced the socio-political matrix, a large concentration of anti-state movements spawned from this region. If the state can give citizens of this region a sense of belonging, the anti-state movements will become marginalized and slowly wither away.

Thus, restoring connectivity between India’s North-East and Bangladesh would highly benefit both countries. India can participate in any economic or industrial activity that facilitates this connectivity, whether it is railroads or river transportation.

You mentioned that power is a major driver. How important is water-sharing in this context?

India and Bangladesh share 54 rivers, and we have an agreement on only one – the Ganges. Until recently, we were on the point of signing a second agreement, on sharing the waters of the Teesta River, but that fell through when the West Bengal government opted out. We are still hopeful that the issue will be resolved – Dhaka and Delhi have already drafted an agreement, but it is now something Delhi must work out with Kolkata.

What are the next steps in the Indo-Bangladesh relationship – maritime agreements, conservation of the Sundarbans, oil and gas in the Bay of Bengal?

Two agreements pertaining to the Sundarbans were signed recently – one on the joint management of the Sundarbans ecosystem, and another on the conservation of the Tiger, which we both claim as a national heritage.

Hopefully, the Sundarbans agreement can become a model for managing other ecosystems that we share – perhaps the ecosystems that connect Bangladesh to India’s North-Eastern states can be explored next.

With regards to maritime issues in the Bay of Bengal, although India and Bangladesh initiated arbitration proceedings under the UN Conference on the Law of the Sea (UNCLOS), we hope the issues can be resolved through bilateral discussions.  Apart from India and Bangladesh, Myanmar too filed their claims in the Bay of Bengal under the UNCLOS. Hopefully, the arbitrators will resolve the matter in a few years.

If the maritime issues are resolved, then the Bay of Bengal will be the centre of action: all three nations believe that an untapped triangular section in the Bay of Bengal holds the highest deposits of oil and gas. Until the issues are resolved, any exploration around that section is a problem – so the sooner it is resolved, the better it is for everyone. It may even open up the prospect of joint exploration of the maritime beds.

To conclude, the biggest gain from the present process, in my view, is that India and Bangladesh are rediscovering each other. You can put political barriers between people – through India’s partition, for instance – but you cannot ignore or wish away your neighbours. Rediscovery will reduce much of the baggage of the legacy of mistrust that has been fostered over the years.

Tariq Ahmad Karim is the High Commissioner of Bangladesh to India.

Hari Seshasayee is a researcher at Gateway House.

This interview was exclusively conducted for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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