Leaving billions on the table

While backwards-looking groups like Difa-e-Pakistan are demanding that Pakistan limit trade with India, Bangladesh is taking a reasoned economic view of their relations and reaping the benefits – benefits to the tune of $1 billion.

For the first time in history, Bangladesh’s exports to India will cross the $1 billion mark in a 12-month period next July, a top Indian official has said at a conference jointly held by Indian Council of World Affairs and Association of Asia Scholars.

This is made possible because Bangladesh is willing to separate its economic interests from foreign policy matters. It does not mean that they are unwilling or unable to criticise India openly, though, even on matters of trade. When India imposed a ban on cotton import, Bangladesh spoke out against this violation of trade norms. Actually, Bangaldesh has moral authority on their side in this complaint because they are seen as a ‘good faith’ trading partner, and not one that uses trade as a tool of foreign policy.

Consider also that Bangladesh has benefitted to the tune of $1 billion and their national economy is almost half the size of Pakistan’s. Imagine how much we would benefit from taking a rational, unemotional approach to intra-regional trade. According to India’s National Security Advisor Shivshankar Menon, Bangladesh is only the latest country to take advantage of the fast-growing market within South Asia.

“Intra-regional trade within South Asia has begun to grow and has doubled over the past five years. We are therefore at a point where it is increasingly evident to all the countries in South Asia that there are substantial costs to not moving forward by lowering tariffs, minimising sensitive lists, and tackling non-tariff barriers. Each government has taken significant actions in the recent past,” he added.

Analysts much smarter than me have made convincing arguments for why trade with india is a rational policy choice. If that’s not convincing enough, though, $1 billion certainly should be.