TRADE can never flourish unless there is amity
and bonhomie between neighbors. With regard to the theories of growth, the flow
of trade has a significance in the determination of the rate of economic growth
because trade allows the progress of technology in a region that ends up
playing a crucial role in productions and gains of competition. This eventually
fosters both the development and growth of a given economy, writes Azdak Samue
of Kenyatta University in his research paper on "International Trade and
its impact on the global economy".
The very fact the South Asian
Association for Regional Cooperation (SAARC) has not taken off even after 35
years is testimony to the acrimony among some of its members who matter the
most from the economic and trade perspective: Afghanistan, Bangladesh, Bhutan,
India, the Maldives, Nepal, Pakistan and Sri Lanka. If only things worked out
well as was envisaged at the birth of this regional cooperation body, there
would have been greater prosperity and better living standards.
The less said about the bitterness between Pakistan and India, the
better. The Islamabad-Beijing alliance on many planks vis-a-vis New Delhi gets
reflected in the trade relations particularly
with the former. The recent Chinese incursions into Ladakh preceded by
the Doklam episode involving Bhutan also has soured trade relations with China
as well.
But that is not as severe as with Pakistan, due to the bilateral trade
between the two Asian giants for long, despite the ugly 1962 Indo-China war.
Sri Lanka has a new government with Gotabaya Rajapaksha as its President,
who is believed to view China in a better light than India. The Chinese have invested heavily in the Sri
Lankan economy compared to India's slow pace of investment and involvement in
the same sphere.
As far as Bangladesh is concerned, the Chinese threat is very much there.
Here again, New Delhi will be unable to match Beijing's deep pockets and its
money power via investments in several Bangladesh infrastructure projects is
visible.
Bangladesh Prime Minister Sheikh Hasina's equation with Prime Minister
Narendra Modi seems to be on an even keel. India's role in liberating erstwhile
East Pakistan to become Bangladesh in 1971 when her father Sheikh Mujibur
Rehman (assassinated later) led the war and become the first Prime Minister
continues to be valued by Hasina. Nonetheless, every ruler desires faster
growth and it is here China is scoring over India massively.
It is pertinent to note that India's foreign secretary Harsh Shringla
visited Dhaka in mid-August and met the
Prime Minister. Significantly this was his second visit to Bangladesh since
taking over in January. At his level, the discussion obviously would have been economic and trade issues.
To give a boost to the Indo-Bangladesh bilateral trade, Indian Railways
ran 103 freight trains in the month of June ferrying essential goods to
Bangladesh. Parcel and container trains moved between the two countries in
July, carrying a wide range of products. Again, a ship sailed from Kolkota to
India's northeastern port near Agartala after a touchdown at Chittogram in
Bangladesh.
Bilateral trade has grown steadily over the last decade: India’s exports
to Bangladesh in 2018-19 stood at $9.21 billion, and imports from Bangladesh at
$1.04 billion. On the other hand, the bilateral trade between Bangladesh and
China is around $18 billion, favoring Beijing.
On the Indo-Nepal front, suddenly there seems to be a lot of discomforts.
Again, the Chinese hand is visible. The redrawing of the Nepalese map is a case
in point. The landlocked Himalayan neighbor's dependence on India is legendary.
More than 65% of Nepal's trade involving both export and import happens via
Kolkota mostly. Despite the long historical, cultural and economic relationship
between the two nations, there are several ticklish issues. The current ruling party Nepal Communist Party
obviously has an interest to side with
China which the latter is taking advantage of.
The Chinese gambit is to isolate
India from its neighbors and it is succeeding. Bangladesh, Nepal and Sri Lanka
have a trade relationship with India for long and any uneasiness in the
bilateral relationship would automatically impact trade.
No nation can progress in the midst of a troubled relationship with its
neighbor. In India's case, it is not just one neighbor, but many. Meanwhile,
China has been isolated globally in the wake of the Corona Virus pandemic. But this has not halted the
Dragon from pursuing its goal to be THE superpower challenging the United
States and its allies particularly in the Indo Pacific region.
SAARC is dead and its revival is unlikely. Rebuilding the old friendship
with its neighbors is going to be a
Himalayan task, particularly in the light of the Chinese strategy to
weaken India's ties with other SAARC members by dangling investment carrot. It
is equally true that these countries are
taking advantage of the India China tussle.
Trade is recognized as a key factor for the
2030 Agenda, including poverty reduction and economic growth. Sustainable
Development Goals (SDGs), adopted by all United Nation members in 2015, target
17.11 aims to significantly increase the exports of developing countries, and
in particular with a view to doubling the LDC’s share in global exports by
2020. Reaching this target is likely to be implausible. There has not been a
substantial increase in the share of exports for LDCs or for developing economies
in general since 2012. The COVID-19 pandemic poses additional challenges for
developing economies in fulfilling not only international trade goals but also
various other SDGs.
