Trade deficit with India for Bangladesh

Barrister Harun ur Rashid

Huge trade deficit of Bangladesh with India has become not an economic but a political issue. The other side of the picture is that huge trade deficit has been caused because the growth of trade with India has dramatically risen in the past five years. It is estimated that there is about US$6 billion worth of exports from India in both formal and informal (smuggling included) sectors to Bangladesh, while Bangladesh is able to export to India to the amount of less than US$100 million.
   The deficit is so large that people are concerned that India should do something to reduce the gap. Otherwise it may be perceived by majority of people in Bangladesh, rightly or wrongly, as “economic exploitation” of Bangladesh by India. Such perception is not politically healthy for bilateral relations.
   Bilateral relations involve not only between the governments but also between peoples and democratic government must take into account of the sentiments of people in dealing with major policy issues with India. If people have negative perception about India, overall bilateral relations get a bumpy ride.
   The recent Foreign Secretary-level meeting in Dhaka has addressed the trade deficit issue and reportedly India would allow certain duty-free goods by December of this year. This has brought relief to people of Bangladesh.
   
   Closer ties with NE India
   Some economists suggest that one of the ways of reducing the trade deficit is the economic and trade cooperation between Bangladesh and the northeast states of India (NEI). A few of them even advocate that closer integration of Bangladesh’s economy with that of northeast states is likely to have drastic reduction of trade gap between the countries.
   Furthermore the integration will have three results: (a) the relatively abundant natural gas in Bangladesh can be used jointly with India to make intermediate products, such as urea which can be sold to northeast states, (b) bigger market for Bangladeshi goods in the northeast states, and (c) easy access of consumer goods to northeast states that now go there in a roundabout way from the main part of India. Bangladeshi goods to northeast states are much cheaper because products bought from the rest of India to the northeast states involve a high transportation costs.
   The NEI are landlocked and it is common knowledge that there is a huge demand for Bangladeshi goods in NEI. Bangladesh is proud of producing quality consumer and other non-consumer goods, comparable to international standard. Many Bangladeshi products have become familiar and popular with people of NEI.
   In the past, the representatives of the Federation of Chambers of Commerce and Industry of Bangladesh met their counterpart from India in Dhaka. The non-tariff barriers were high on the agenda. For the first time, the two apex bodies discussed formally, among others, the removal of non-tariff barriers relating to trade and investment.
   The recommendations of the meeting include setting up new land customs stations for bilateral trade between Bangladesh and northeast states and formation of a panel to resolution of trade disputes. Furthermore the two sides recommended setting up of testing laboratories close to the border areas, simplification of licensing system, documentation and procedural requirements and efficiency development of the banks of NEI.
   They also agreed to recommend 16 Bangladeshi items duty free access to India The list include five items—iron ore, paper pulp, limestone, plastic products and fruit pulp—where the raw materials have to be imported from India, processed in Bangladesh, and exported to India.
   There is a needed to take decisions at the political level to implement the recommendations by the two apex business bodies of Bangladesh and India. Experts say that if 30% per cent of the recommendations are implemented, bilateral trade will be doubled in just one year.
   
   Non-tariff barriers
   Despite the compelling economic reasons, Bangladesh exporters find it difficult to dent the market in NEI. The question is: Why?
   It is reported that during 2004-05, Bangladesh was able to export goods to NEI worth ofUS$5.086 million while it imported goods from NEI worth of US$45.15 million. Although Bangladesh has a comparative advantage over Indian goods in the NEI as cost-effective, non-tariff barriers make Bangladeshi exporters difficult to send goods to NEI.
   Statistics show that a total of 94 Bangladeshi products were exported to the NEI during 2004-05. They include jute, jute goods, chemical fertilizer and frozen foods. Interestingly the four products constitute about 60 per cent of total products exported to NEI. Other consumer goods such as soft drink, biscuits, soap, talcum powder, battery, jamdani saree, ready made garments, dry fish, mineral water, soybean oil, electrical goods, furniture, cement, bicycle, and other consumer items face strict non-tariff barriers.
   Experts believe that one of the main reasons is the non-tariff barrier imposed by India for Bangladeshi products. Indian market is not an import-friendly one, although India has de-regulated its economy since 1991. There are various rules and regulations such as non-tariff, and para-tariff barriers that the Indian customs use in obstructing import of products from Bangladesh to India.
   Some of the hurdles in exporting goods to NEI include the absence of warehouse, parking and banking facilities. It is reported that Indian Customs do not give the entry to Bangladeshi products on the plea that they need laboratory tests to determine their standards and certification. Many of the products that are in high demand in the NEI are sent back by the Indian Customs for one reason or another.
   We hope that as a result of the Foreign Secretary level meeting, non-tariff barriers would be removed. Furthermore during the meeting, both countries signed an agreement on “standard” of goods certified by their regulatory institutions to be acceptable in each others country.
   Another 11 products from Bangladesh which have a minimum 20 per cent value addition, include fish and fish like products, edible oil, automotive battery, cosmetics,, toiletries, electric copper wire, jute and jute related products, melamine, leather and leather products, pharmaceuticals and footwear are also recommended for duty-free export to India.
   Experts believe that transportation of goods between two countries must be facilitated through containerised movement of cargos, by road transportation, railways and inland waterways.
   All these steps will be able to reduce the trade deficit for Bangladesh. It is believed that given the size of economy of India, duty-free access of Bangladeshi goods to India will hardly adversely affect Indian’s larger economy. Fair trade will be a “win-win” situation for both countries.
   The writer is a former Bangladesh Ambassador to the UN, Geneva.

^ TOP OF THIS PAGE ^ MAIN PAGE

Mirror, mirror on the wall, who is the toughest of them all?

Nasrine R Karim

The show of harmony between the leaders of the G8 states, which was publicly celebrated at their summit in Heiligendamm, Germany, lasted less than 24 hours. The participants were still making their way home when conflicts erupted particularly between the US and Russia.
   On his return flight to London from his last G8 Summit, the former British Prime Minister Tony Blair gave an in-depth interview to three journalists from Der Spiegel magazine. The first thing he said was that the conflicts with Russia remained “unresolved”.
   “Of course, there is the desire to overcome mutual difficulties,” Blair said as he returned from his last G8 Summit, “but the existing differences remain.” He continued, “Naturally, good relations with Russia are important, but there are now deeply different views in Europe about how to reestablish them.” Predictably, Blair expressly defended the setting up of a missile defence system by the United States in the Czech Republic and Poland. The bone of contention between Russia and USA. Russia vehemently rejects these plans and regards them as a threat to its own security. At the G8 summit, Russian President Vladimir Putin put forward his own suggestion for a missile defence system to be based in Azerbaijan and run as a cooperative project by Russia and the US.
   When the United States officially announced that it has entered into an agreement with the Czech Republic to host a radar station as part of the Missile Defence Initiative (MDI) system, which would combine long-range radar and interceptor missiles to detect and shoot down ballistic missiles, it sent disconcerting vibes in Moscow. To add to the discomfort, the Polish government also announced that it was amenable to the US using a base on its territory to house a large silo capable of launching interceptor missiles.
   The American missile shield is ostensibly intended to be the counter-offensive to any nuclear launch attempt decisively in favour of Washington. Dubbed the “Son of Star Wars,” after the Reagan administration’s planned anti-nuclear missile system aimed at the Soviet Union, a functioning US missile shield would end the era of so-called “Mutually Assured Destruction”—whereby an attack by one nuclear armed power on another would result in the decimation of both.
   The Czech Republic and Poland are, since the lifting of the Iron Curtain, very close allies of Washington and members of NATO. Poland has soldiers participating in the occupation of Iraq and has agreed to host other conventional US military bases. Both countries are part of what former Bush administration Defence Secretary Donald Rumsfeld called “New Europe” in the run-up to the invasion of Iraq in 2003. The US has already built missile interceptor sites in Alaska and in California, but says it needs to spread its coverage into Europe in order to counter “growing threats.”
   Washington has insisted that its missile shield will be used to defend itself and its allies from attack by “rogue states,” a term commonly used by the US government to describe Iran and North Korea. However, neither Iran, which has not carried out a nuclear detonation test, nor North Korea, whose nuclear weapons capability is very crude, are credible targets. The primary intention of the US shield seems to be to disable the attack capabilities of those rival countries that actually have missile delivery systems capable of striking the United States or have the possibility of seriously threatening its major bases like Russia.
   Russia’s Defence Minister Sergei Ivanov said then, “Russia is not worried. Its strategic nuclear forces can assure in any circumstance its safety. Since neither Tehran nor Pyongyang possesses intercontinental missiles capable of threatening the USA, from whom is this new missile shield supposed to protect the West? All it actually amounts to is that Prague and Warsaw want to demonstrate their loyalty to Washington.” General Yuri Baluyevsky, Russian chief of General Staff, described the deployment of parts of the missile shield into Europe as an “unfriendly move, to put it mildly.”
   Recent Russian and U.S. nuclear trends serve as a reminder that the one-time Cold-War rivals’ nuclear decisions are central to today’s counter-terrorism and non-proliferation efforts. The nuclear capabilities of the Russian military have not been in the limelight much since the Sept. 11, 2001 attacks on Washington and New York, but it is certain, that Russia remains a massive nuclear force by any given standards.
   The Cold War may be over, but Russia is not completely out of the arms race yet, and some analysts say any sensible counter-proliferation and counter-terrorism strategy will have to pay close attention to Russia’s nuclear assets and ambitions.
   Carnegie Endowment for International Peace senior associate Rose Gottemoeller wrote in an article entitled Arms Control Today, noting that Putin has achieved three major goals: It recalled the days of Soviet power for nostalgic Russian voters, it showed the Russian armed forces that Putin is dedicated to them and considers the Russian military an important national institution, and it showed the international community that Russia is a nation too powerful to be ignored or brushed aside.
   The Bush administration’s decision to take a soft-line approach against the Pakistani government—after Pakistani military scientist Abdul Qadeer Khan admitted to being at center of an international black-market network to sell nuclear components—irked Russia, which is within easy reach of Pakistani missiles.
   The alternatively relative strict U.S. reaction to Iran’s nuclear ambitions also displeased Russia. Russia has played a large role in helping to build what it says is a legitimate nuclear power program there. Justified or not, U.S. non-proliferation measures have not done much to increase cooperation with Russia.
   Both Russian officials and US agreed in the run-up to the latest encounter - a brief but tense summit at the Bush family compound in Kennebunkport, Maine – soon after the G8 Summit, actually lasted also no less than 24 hours that nothing significant was reached. Putin, on the fishing trip with Bush Sr. and Jr., expanded on the surprise proposal he floated at the G8 summit to transform a proposal to set up a US-built missile shield in the former Warsaw Pact countries of Eastern Europe into a joint US-Russian project to be based at a Russian military installation in the former Soviet republic of Azerbaijan.
   Both the initial proposals made in Germany and the amplified version put forward at the seaside resort in Maine are really aimed at undercutting US attempts to militarily encircle Russia.
   However, the Bush administration was anxious to dispel any expectations of a breakthrough on any of the multiple geo-strategic issues that have escalated the conflict between Washington and Moscow to the sharpest level since the end of the Cold War nearly two decades ago. Predictably, the US president described the talks with Putin by a carefully worded non-committal declaration: “We had a good, casual discussion on a variety of issues,” said Bush. “You know, through the course of our relationship there have been times when we’ve agreed on issues and there’s been times when we haven’t agreed on issues. But one thing I’ve found about Vladimir Putin is that he is consistent, transparent, honest and is an easy man to discuss our opportunities and problems with.” Very cordial indeed!
   Putin, however, was more positive on the talks, declaring that he and Bush had “discussed basically the entire gamut of both bilateral issues and international issues.” He added, “We are seeking the points of coincidence in our positions and very frequently we do find them.” It was obviously clear that this “coincidence” in US and Russian positions had not brought the two sides any closer to a concrete agreement on the other main point of contention i.e. Iran.
   Putin stated his commitment to continuing to deal with the Iranian nuclear question in the UN Security Council. Presumably, as opposed to US unilateral military action, Putin cited “positive data and information” coming out of talks between Iran with European Union foreign policy chief Javier Solana and with the International Atomic Energy Agency (IAEA).
   Moscow has its own complex political relations with Teheran, seeing a US war against Iran as a strategic threat to its ambitions within the Central Asian region. A conflict with the Islamic Republic which may also threaten to animate political Islam in Russia’s own border territories as well as in former Soviet regions of Central Asia.
   In Teheran of the five nations bordering the Caspian Sea this complicated relationship found expression in a statement by Russian Foreign Minister Sergei Lavrov, who declared that Russia was the only one of the five that possessed the military capacity to defend the region against “the greed and ambitions of hostile outsiders.”
   The growing unease in Moscow over the steady expansion of US military influence in the former Soviet republics of Central Asia under the pretext of combating terrorism has been sharply heightened by the US missile shield proposal for protection against ‘rogue’ states: Iran.
   The Russian government has insisted that Iran poses no such threat and that such facilities as proposed by USA, threaten Russia’s own security. Kremlin spokesman Dmitry Peskov declared, “If the US is deploying radar in the Czech Republic, this radar will be aimed against us, because there won’t be any other targets.”
   The Russian President went so far as to compare US foreign policy to that of Hitler’s Third Reich and to characterize Washington—not really inaccurately—as the “main violator of freedoms and human rights on a global scale.” Putin, meanwhile, has charged that the US plan represents a resurgence of the nuclear arms race that would inevitably require a response from Moscow, including the retargeting of its own nuclear arsenal toward Europe.
   Putin used the Kennebunkport meeting to counter by expanding on the Russian proposal to use Azerbaijan as an alternative site for the proposed US missile shield, placing it under joint US-Russian control. This was clearly meant to undercut and expose the Bush administration’s offensive plan. The Russian President also called for bringing more European nations into the process of deciding how to deploy the envisioned missile shield and offered to provide other facilities in southern Russia.
   However, while describing Putin’s proposal as “innovative” and “very sincere,” Bush made it clear that his administration has no intention of giving up its original plan to insert US nuclear power into Eastern Europe.
   Presumably, these tensions are fed, on the one hand, by the growing confidence of the Russian state as a result of the significant growth of the Russia’s economy based on the wealth flowing from its vast energy resources. On the other hand, there is the mounting perception of the weakening of US power as a result of the deepening debacle in Iraq and Afghanistan.
   Putin accused other complicit developed countries of protectionism and recommended the creation of a “Eurasian Institute for Free Trade.” He also criticized global financial markets, which, he said, were dominated by “one or two currencies,” i.e., the dollar and euro. “There is only one answer to this challenge: the creation of different world currencies, different financial centres,” he declared.
   Russian Deputy Prime Minister Sergey Ivanov, who is regarded as a likely successor to Putin, announced a diversification of the Russian economy. By 2020, the country would control at least ten per cent of worldwide production in the sectors of nuclear energy, air and space travel, shipbuilding, software and nanotechnology, and establish itself as one of the five largest industrial nations, he claimed.
   It was 16 years ago that Bush Sr occupied the White House at the time of the Soviet Union’s dissolution and the heady proclamations of a “unipolar world” and the emergence of US as the world’s sole super-power. Now his son is reaping the bitter results of Washington’s hubris, including the resurgence of a nuclear-armed nationalist Russia whose tense conflicts with US interests threaten to further destabilize the international situation with potentially catastrophic results.
   “We will bankrupt ourselves in the vain search for absolute security”: Dwight David Eisenhower: 34th president of the United States, 1890-1969. He obviously knew better!

^ TOP OF THIS PAGE ^ MAIN PAGE

Thalif Deen at UN

A long-awaited international convention against nuclear terrorism came into force last week, nine years after it was originally proposed by Russia and 10 months after it was adopted by the 192-member General Assembly. But most of the major powers, including those with nuclear weapons, are giving it a miss —- at least so far.
   “The convention will help prevent terrorist groups from gaining access to the most lethal weapons known to man,” says Secretary-General Ban Ki-moon, who describes nuclear terrorism “as one of the most serious threats of our time.”
   The new international treaty, which has 115 signatories, needed 22 ratifications before it became international law. The 22nd country to ratify was Bangladesh. The treaty came into force Jul. 7.
   Dr. Natalie J. Goldring, a senior fellow with the Centre for Peace and Security Studies and an adjunct full professor in the Security Studies Programme at the Edmund A. Walsh School of Foreign Service at Georgetown University, however, expresses doubts about the effective implementation of the convention. To fully implement this convention, she pointed out, signatories must also carry out related measures through national legislation. “This will not be easy,” Goldring told IPS.
   As of mid-June, she said, the only permanent member of the U.N. Security Council to ratify the convention is Russia. And the only other nuclear state that has ratified the convention so far is India. The United States has signed the convention, but has not ratified it, she added.
   Still, Goldring said, this convention is likely to contribute to efforts to prevent nuclear terrorism by bringing additional attention to this crucial issue. “However, the world community has a great deal of work to do. We need to limit access to nuclear weapons and radioactive material much more effectively than is currently the case.”
   The 22 ratifying parties who have expressed their willingness to implement the treaty include: Austria, Bangladesh, Belarus, Comoros, Croatia, Czech Republic, Denmark, El Salvador, Hungary, India, Kenya, Latvia, Lebanon, Mexico, Mongolia, Romania, Russia, Serbia, Slovakia, South Africa, Spain, and the former Yugoslav Republic of Macedonia.
   The world’s five declared nuclear powers are the United States, Britain, France, Russia and China. India and Pakistan have declared their nuclear weapons but are not considered “nuclear weapon states” under the Nuclear Non-Proliferation Treaty because it defines nuclear weapons states as those that tested weapons before January 1967. Israel and North Korea are also believed to have nuclear weapons.
   Officially titled “The International Convention for the Suppression of Acts of Nuclear Terrorism”, the treaty outlaws specific, concrete acts of nuclear terrorism. One of the objectives of the convention is protection against attacks involving a broad range of possible targets, including nuclear power plants and nuclear reactors.
   Under the convention, all parties to the treaty will have to cooperate in preventing terrorist attacks by sharing information and assisting each other with criminal investigations and extradition proceedings.
   “The entry into force of the Nuclear Terrorism Convention must of course be welcomed as a demonstration of the consensus within the international community that nuclear weapons must not be acquired by terrorist groups,” a former U.N. Under-Secretary-General for Disarmament Affairs, Jayantha Dhanapala, told IPS
   However, he pointed out, there is a rich irony in the fact that key members of that same international community have failed to ratify such important treaties as the Comprehensive Nuclear Test Ban Treaty preventing the development of new nuclear weapons.
   The five permanent members of the U.N. Security Council and at least three other countries outside the Nuclear Non-proliferation Treaty, he said, have about 26,000 nuclear weapons among them, of which 12,000 are on alert status.
   “These are weapons of terror and there can be no distinction between ‘right’ hands and ‘wrong’ hands for their possession in terms of the humanitarian principles of war and the International Court of Justice’s Advisory Opinion of 1996,” said Dhanapala, who is also a member of the Weapons of Mass Destruction Commission. Cora Weiss, the U.N. Representative of the International Peace Bureau and president of the Hague Appeal for Peace, says the best thing about this convention is that it brings the nuclear issue back to the table, and hopefully, to the consciences of the world’s governmental leaders.
   “What would really prevent nuclear terrorism is the total abolition of nuclear weapons. And that is not a pipe dream,” Weiss told IPS. She said that a recent op-ed piece in the Wall Street Journal calling for a nuclear-free future, and authored collectively by former U.S. Secretaries of State Henry Kissinger and George Shultz, former U.S. Defence Secretary William Perry and former Senator Sam Nunn, has been in wide circulation among anti-nuclear activists and members of civil society.
   She said there is also the World Court decision that generally nuclear weapons are illegal under international law; there is the Hans Blix Commission report on weapons of mass destruction; “and we have just celebrated the 25th anniversary of filling Central Park with one million people who gathered to say, ‘Good bye nuclear weapons’.”
   Even the most recent foreign secretary of Britain, Margaret Beckett, endorsed the Wall Street Journal op-ed piece. “And we will soon, once again, remember the Nagasaki and Hiroshima atomic bombings,” Weiss said. She said there has never been a better time to revive the campaign to free the world of the most deadly and lasting possibility: nuclear devastation.
   Goldring described the convention as one of a constellation of measures to decrease the risks of nuclear terrorism. If fully implemented, she said, it would increase the level of cooperation among states and the quantity and quality of information they share with respect to terrorist incidents.
   “It also has an important focus on safeguarding any nuclear or radiological material that is captured by states,” she said. “Unfortunately, while this step is laudable, no single measure is going to solve this problem, and the convention is relatively modest in comparison with the work that needs to be done.”
   Goldring also said that outlawing nuclear terrorism is not enough: “We urgently need to secure the surplus nuclear material in the former Soviet Union and elsewhere, and to protect nuclear facilities around the world.”
   — Inter Press Service

^ TOP OF THIS PAGE ^ MAIN PAGE