On March 22 Bhutan and Bangladesh inked a transit deal in Thimpu, the capital city of Bhutan to ease further bilateral trade between the two countries. It is good news for many reasons. Bhutan was the first country in the world to recognize Bangladesh as an independent and sovereign country following the Liberation War in 1971.
Bhutan is one third the size of Bangladesh with a population of less than one million. Bangladesh has in many ways assisted Bhutan for a long time. One of the sectors where Bangladesh helps Bhutan immensely is in medical education. Every year, many students from Bhutan receive their medical education from Bangladesh. Even Bhutan’s incumbent Prime Minister Dr Lotay Tshering received his medical degree from Bangladesh.
Bhutan opened diplomatic relationships with Bangladesh in 1973 but since then, the two countries have not been able to draw benefit out of their relationship as they have no direct border. A 30-km strip of Indian territory separates the two countries making it difficult for them to make the best use of their relationship. Being a landlocked country, Bhutan’s main source of export is its hydropower from the Himalayan water resources, due to which Bhutan has an energy surplus. It also has large untapped hydropower potential.
This transit deal will now pave the way for energy imports from Bhutan. A bilateral Free Trade Agreement (FTA) has already been signed between the two countries. It was signed in 2009 with emphasis on hydropower export from Bhutan to Bangladesh. After the agreement it is going to get momentum. On the other hand, Bhutan will be able to use our air, railways, river ports, land ports and sea ports, as being a landlocked country, it has no rivers and seaports of their own.
Some 100 Bangladeshi goods like garment items, fruit juices, particle boards, potatoes, cement, biscuits, cosmetics, sugar, jute or coconut fiber carpets, footwear, corrugated iron sheets, iron rods, cables and dried fish are enjoying preferential duty benefits on export to Bhutan under the Preferential Trade Agreement (PTA). Under the PTA, Bhutanese goods like milk, natural honey, cement clinker, soap, mineral water, portland cement, ferrosilicon, wheat bran, boulder stone, dolomite, gypsum, calcium carbonate, apples, pears, cabbage, cauliflowers, oranges, potato, dried chilis and cardamom are enjoying the same benefit.
Now both the countries can maximize the use of those goods as hopefully prices of these items will come down significantly after the agreement comes into effect. By giving transit facility to Bhutan, Bangladesh can also benefit from various charges and fees against the products to be imported and exported to and from Bhutan. Furthermore, the country will see infrastructural development and revenue income will increase.
Speaking on the occasion, the Bangladesh Commerce Minister Tipu Munshi rightly termed it an epoch-making agreement that would further simplify the trade and commerce between the two countries and take it to new heights. We hope and believe that this agreement will strengthen diplomatic and economic tie between the two countries. He also stressed the need for increasing bilateral relations in the agricultural sector, especially for increasing the trade of mushrooms and other agro-products.
If this can happen, both the countries can enjoy the benefits. Both these countries, being peace-loving nations, can help each other to tap the potentials of resources they have at their disposal. Of course, it is going to be a win-win situation.
With Bangladesh looking to take the next logical step in its economic journey, it has never been more important for it to build better relationships with other nations, particularly those within South Asia.
Indeed, among criticisms directed at the entirety of the South Asian region is the relatively poor connectivity, and it is only through bilateral understanding and agreements on the part of all the nations that we will see progress made.
For Bangladesh, these are the sort of conversations and agreements it must continue to pursue and ensure that they are implemented.
It is therefore imperative that Bangladesh continues with its “friendship to all and malice to none” approach to diplomacy, and together with the assistance of all of its current and potential partners, Bangladesh can fulfil all of its economic goals.
*The writer is a freelance researcher and columnist.
March 31, 2023
The viewpoints expressed by the authors do not necessarily reflect the opinions, viewpoints and editorial policies of Aequitas Review.
