Economic diplomacy as a game changer in Pak-BD ties

Pakistan and Bangladesh, after years of adversarial relations between them during the regime of Prime Minister Sheikh Hasina, now seek to mend fences. Economic diplomacy is one area which can set the ball rolling in pursuit of normalisation of ties between the two countries. After all, we have seen cricket, ping pong and mango diplomacies achieve desired results.

Focusing on economic diplomacy, Pakistan and Bangladesh can expect qualitative breakthrough in the bilateral relations. Recently, a high powered delegation of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) visited Dhaka. A Memorandum of Understanding was signed between the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and FPCCI. The two sides decided to establish Pakistan-Bangladesh Joint Business Council, aimed at strengthening trade and commercial ties between Dhaka and Islamabad. Prior to the visit of the FPCCI delegation to Dhaka, two cargo ships were sent to Chittagong from Karachi, marking the resumption of direct maritime trade between the two sides.

Even though the Interim Bangladesh government is pursuing a cautious approach as regards mending fences with Pakistan, one can still see a shift in the bilateral ties. Now - after almost 15 years of standoff between Dhaka and Islamabad during the Hasina regime - high level contacts have been established between the two sides. Prime Minister Shehbaz Sharif has held two meetings with Bangladesh's Chief adviser Dr Mohammad Yunus in New York and Cairo in which the two sides agreed to take steps to boost the bilateral ties.

While in Dhaka, the FPCCI delegation visited the International Trade Fair and explored prospects for augmenting trade and commercial ties. The FPCCI President, in talks with his Bangladeshi counterpart, identified several areas of cooperation namely electronics, cars, industrial machinery, carpets, toys, ceramics, sanitary products, handicrafts, fabrics, furniture, plastic goods, jute products, cosmetics, sports goods and jewelry. The FPCCI delegation also held meetings with the office-bearers of Bangladesh Investment Development Authority for exchange of delegations, collective trade promotions and holding single-country exhibition. In order to promote trade and economic relations, both Bangladesh and Pakistan have eased the visa issuance process and pledged maximum facilities to the businessmen from both sides.

The recent measures taken as part of the economic diplomacy remind one of the visit of President Pervez Musharraf to Dhaka in July 2002. During the visit, Pakistan gave duty-free access for jute and tea exports to Pakistani markets and revitalised the Bangladesh-Pakistan Joint Economic Commission. Unfortunately, steps taken during Musharraf's visit to Dhaka were derailed in 2009 when Awami League came to power and Sheikh Hasina became the Prime Minister.

Economic diplomacy will certainly help the process of political reconciliation in the Pak-BD relations and promote defence, security, educational and cultural cooperation. Pakistan can certainly learn from the economic success of Bangladesh during the last three decades. Presently, Bangladesh is better than Pakistan in terms of per capita income, exports, foreign exchange reserves and currency value. In view of a potential retaliation from India, Bangladesh needs to strengthen its trade and economic relations with China and Pakistan.

Economic diplomacy can be a game changer in bettering Pak-BD relations in three ways, as follows:

First, the trade balance between the two countries is in favour of Pakistan - something Bangladesh would want to change by exploring Pakistani markets for export. Currently standing at less than one billion dollars, the bilateral trade volume has a potential to rise to $5 billion in the next few years. A free trade arrangement can have a win-win situation for both. The Joint Business Council of Bangladesh and Pakistan, established on the occasion of the FPCCI delegation's visit to Dhaka, can be a milestone in economic diplomacy. Proposed trade exhibitions in Karachi, Lahore, Islamabad, Dhaka and Chittagong will provide a valuable opportunity for businessmen from the two countries to explore markets for trade.

Second, better sea and air connectivity between the two countries is essential and should be a part of economic diplomacy. The resumption of direct shipping cargo services between the ports of Karachi and Chittagong is a welcome development. Pakistan has got an order to export 25,000 tons of sugar to Bangladesh, and Dhaka can send its products to the port of Karachi, using the shipping cargo service. Resumption of the direct air link between the two countries, suspended for years, would also help boost the economic relations. Before 1971, there used to be Karachi-Dhaka and Lahore-Dhaka direct flights, but then India banned its airspace for Pakistani flights under the drama of Ganga plane hijacking. While India cannot impose any restrictions on Pakistan's use of its airspace, nothing can be said about New Delhi's intentions. Regular shipping and air link between Pakistan and Bangladesh will not only boost bilateral trade and commercial relations, but also promote people-to-people contacts.

Third, there is need for a creative and innovative leadership on both sides, imbued with political will to turn around things. If economic diplomacy is effectively pursued, other impediments to the normalisation of Pak-BD ties can be gradually removed. Chief Adviser Yunus, in his meeting with PM Shehbaz in Cairo, had emphasised the need to get over the 1971 syndrome.

The recent visit of Bangladesh Army's Principal Staff Officer Lt-Gen SM Kamrul Hasan to Islamabad and his meetings with Chairman Joint Chiefs of Staff Committee Gen Sahir Shamshad Mirza and Chief of Army Staff Gen Asim Munir on January 14 is also a key development. The two sides discussed ways to enhance defence collaboration and cooperation in regional security. General Shamshad is expected to visit Bangladesh in near future. Pakistan's Foreign Minister is also scheduled to visit Dhaka in February to pave the way for augmenting diplomacy in foreign policy and enhance defence cooperation.

One needs to be mindful of how Indian diplomacy can attempt to impede the growing thaw in the Pak-BD ties. The fence-mending that is being pursued is a great challenge too, given the fact that Bangladesh, surrounded by India from three sides, is highly dependent on it, and its RAW has a deep-rooted influence on Bangladeshi state and society.