A river named Teesta scuppered what would have been truly a historic visit by Prime Minister Manmohan Singh to Bangladesh.
The intransigence of Paschimbanga chief minister Mamata Banerjee in supporting a more equitable sharing of the waters of this river meant that India failed to deliver on a key takeaway for Bangladesh.
India, in turn, failed to secure a takeaway in terms of connectivity to its Northeast. India’s trade concessions may have salvaged the visit but, overall, both countries have mixed feelings about it.
An accord on the sharing of Teesta’s waters — including that of Feni, Manu, Muhuri, Khowai, Gumti, Dharla and Dudhkumar among other common rivers — was indeed critical as the lower riparian Bangladesh needs a guaranteed flow of water throughout the year for its agricultural operations.
To ensure such a regular flow of the Ganga, both countries concluded a historic 30-year Ganges Water Treaty in 1996. A similar agreement was needed for the Teesta, especially for sharing during the lean season.
Banerjee’s hardline stance was obviously dictated by politics, as she felt that what was being negotiated was detrimental for farmers in North Bengal districts.
In any negotiation between two countries, there is always a delicate balancing act between micro pain and macro gains or between long-term benefits from freer trade with short-term costs that could inflict pain on its farmers and other stakeholders.
In her zeal to uphold the interests of the state, the big picture was lost sight of.
What is the big picture? Singh’s trip was intended to be a game-changer for two related but distinct ideas: the formation of a larger Bay of Bengal grouping, and South Asian integration with a neighbour that would acquire a greater stake in the rise of India as a global power.
Unless the member countries of the Bay are connected through road, rail, air and shipping services, the former idea fails to take off. The latter requires accepting asymmetrical responsibilities like unilateral trade liberalisation.
Thanks to the standoff over Teesta, the formation of a Bay of Bengal grouping is blowing in the wind. India won’t have better access to the Northeast and to Mongla and Chittagong in Bangladesh.
Out of 38.9 tonnes of cargo movement, 18 million tonnes could have been diverted if transit through Bangladesh were allowed. This formation cannot come into being unless Bangladesh provides seamless connectivity between India and the Northeast and extends it to Myanmar and the others rimming the Bay of Bengal.
South Asian integration, too, is unlikely to see the light of day. Bangladesh has been resentful that it has registered a massive and growing deficit vis-à-vis India that amounted to $3 billion in 2010-11. For a country that is one-fifteenth the economic size of India, it has been demanding unrestricted and duty-free access to the latter’s market.
India has now agreed to provide freer access for Bangladesh’s garments in which it has become a global player.
But given the disappointment on the Teesta front, a truly big bang initiative could have been to provide unrestricted duty-free access for all Bangladesh’s goods.
If India could do so for readymade garments that accounts for 80% of Bangladesh’s total exports, would freeing up the remainder pose any problems?
For a country that enjoys a $3 billion trade surplus, the revenue forgone if it dropped its sensitive list was pegged at $5 million for 2008 by the Bangladeshi think-tank, Centre for Policy Dialogue.
India could thus have enabled Bangladesh to acquire a greater stake in its economic progress.
But all of this has to await a more propitious moment. To be sure, there were a number of positives at the summit like the landmark deal to demarcate boundaries; making cross border supply of power a reality and helping build infrastructure.
But the river ran through it all.
(N Chandra Mohan is an economic and business commentator based in Delhi. The views expressed by the author are personal)