It may be home to 22% of the world?s population, but South Asia remains the world?s least integrated region?with intra- regional trade amounting to only 5% of its total trade. But despite such a dismal background, there is probably no better moment to increase economic cooperation in this region. All South Asian states now boast democratic governance structures. This is also one of the only two regions in the world where GDP growth rate is near 8%. As PM Manmohan Singh meets Bangladesh, the commitment to cooperation to accelerate growth, deepen cross-border trade and investment, and seek more stability in the neighbourhood can now begin to move beyond mere speeches to concrete action on the ground. The Bangladesh government has struck an emotive chord by recognising Indira Gandhi?s ?outstanding contribution? to the country?s freedom struggle through its highest state honour. India, in turn, has announced a $1bn credit line for Bangladesh, the largest offered to any country. Singh?s visit to Dhaka is being heralded as historic, admittedly with much greater enthusiasm in that country, and it offers plenty of scope to build on. Even the last-minute shock delivered by Mamata Banerjee?who has baulked at the Teesta water-sharing deal that was the fruit of complex negotiations in which she was very much in the loop by all accounts?is being received rather graciously by Bangladesh. As a Daily Star editorial over there put it, ?We are shocked but still hopeful of a successful outcome of the visit.?
Note that while India has been anaemic in engaging its neighbourhood, China has made robust inroads?from Nepal to Sri Lanka and from Pakistan to Bangladesh, where it now reigns as both the biggest trading partner and the primary supplier of military equipment. Note also what The Economist pointed out recently: all that India and Bangladesh are attempting to establish today is what West and East Germany enjoyed even at the height of the Cold War, from an undisputed international border to a well-established transit system for goods, trains and peoples. Bangladesh is looking to us for trade concessions, especially in textiles, that will dramatically impact its growth. We are looking at it for transit solutions that will equally dramatically transform connectivity for the Northeast. It?s actually a win-win situation.
