Bangladesh government defends transit to India

Blames media, scholars for creating confusion

Mashiur defends transit to India
Prime Minister’s Economic Affairs Adviser Dr. Mashiur Rahman speaking at a session of the two-day IGC South Asia Growth Conference at a city hotel Monday. Noted economist Prof. Wahiduddin Mahmud was also present. — FE Photo

FE Report July 17, 2012

Prime Minister’s economic adviser Dr Mashiur Rahman Monday blamed media and some scholars for making the nation confused about the transit facility being offered to India hiding the fact about its future benefit.

“They are making stories not based on facts. They are not making the people of Bangladesh aware about the great potential of the transit facility,” said Mr Mashiur while speaking as chief guest at a seminar on regional economic integration held in the city.

The seminar was held as part of the two-day South Asia Growth Conference jointly organised by the International Growth Centre (IGC) and the Economic Research Group, Dhaka on the concluding day of the conference.

Noted economist Dr Wahiduddin Mahmud was moderator of the session while former caretaker government adviser Dr Mirza Azizul Islam and chief information commissioner Muhammad Zamir spoke as special guests. Tony Venables of Oxford University presented a keynote paper on geography and economic integration of the region while Ijaz Nabi of Lahore University presented a paper on India-Pakistan trade. Shaibal Gupta of Centre for Economic Policy and Public Finance of Patna presented another paper on economic history of Bengal presidency.

Mr Mashiur, however, said the transit facility would create a scope for exporting Bangladeshi goods to the north-eastern part of India. “They (Indian manufacturers) need at least three times higher time to send their produce to the north-east from the main land of India. So we can exploit the situation as it is very close to us.”

He said many Indian entrepreneurs might invest in Bangladesh to tap the benefit of proximity. “If you go to Benapole or any other landports, hundreds of entrepreneurs are showing their keen interest to invest in Bangladesh simply to take the advantage of low transport cost.”

He said Indian investment is important for Bangladesh. “Our investment is mainly concentrated on bank financing and conceptual loans ……”

Mr Mashiur said as per the customs act, 1969 India does not need to pay any duty to Bangladesh for using its territory for the purpose of transit. “The act clearly says that it does not need to pay duty for movement of goods from one country to another.”

He said the law might have been enacted, as the then Pakistan government had been aware of the business potential of India’s north-eastern region, popularly called seven sisters.

Mr Mashiur told the reporters after the seminar, “If the use of Panama canal does not require any duty, so why Bangladesh?”

He also said if US ships can call at Bangladesh ports, “then why not Indian ships?” If India uses Bangladesh ports, the charges should be based on the customs act of 1969, he added.

He said as per the connectivity with the north-east part of India Bangladesh’s products will have a good access there.

The north-west connectivity should be explored in a bid to ensure Bangladesh’s access to the hydropower of Nepal and Bhutan.

The south-west connectivity can link Bangladesh with Mynamar and China creating a possibility of importing gas through pipelines from Myanmar.

Speaking at the seminar, Mirza Azizul Islam said there should be physical connectivity prior to any economic integration and before that there should be an assessment of investment.

Mr Mirza said political problems among the nations should be resolved to derive benefits of the integration.

Muhammad Zamir said regional integration should mean more political stability and security.

Ijaz Nabi said improvements are needed to be ensured in Pakistan so that it can become a major manufacturer, not just a transport hub.

Tony Venables said Asia has much to gain from regional integration. He said economic integration helps increase productivity.