Strengthening Nepal-Bangladesh Relation

By GP Acharya (KATHMANDU, 17 November 2019) – The President of Bangladesh Mohammed Abdul Hamid visited Nepal in an official goodwill call from November 12 to 15 at the invitation of President Bidhya Devi Bhandari. President Hamid visited the Lake City Pokhara and some archeological and cultural sites in Kathmandu during his stay.

According to the government sources, Nepal and Bangladesh discussed on all issues of mutual interest in this high-level visit. Reportedly, both the nations were scheduled to hold talks on Preferential Trade Agreement (PTA) and BBIN (Bangladesh-Bhutan-India-Nepal) Motor Vehicles Agreement during president Hamid’s visit. Likewise, Bangladesh waas expected to finalize the PTA with Nepal. Earlier, Prime Ministers Sheikh Hasina and KP Sharma Oli had also discussed about PTA in the sidelines of 18th NAM summit held in Azerbaijan. 

Nepal and Bangladesh have established diplomatic relations in 1972. Since the establishment of diplomatic relations both the nations are enjoying excellent bilateral relations which are based on mutual coordination, cooperation, understanding, trust and friendship. Nepal is one of the seventh countries to recognize Bangladesh by establishing diplomatic relations back in 1972. Both the countries have closed friendship besides being mutual friends, with common interests, in various regional and international organizations.

The economic and commercial relations between Bangladesh and Nepal are momentously cherishable. Both the nations have tremendously explored the potentials for diversifying trade. The mutual cooperation between the two countries shields numerous areas from tech to trade, agriculture to culture, tourism to technology transfer, education to soft power resources. As of now, Bangladesh exports industrial raw materials, chemicals, electric and electronic items, jute products, fabrics and textiles among others to Nepal. While Bangladesh imports lentils, cardamom (large), wheat, vegetable seeds, handicrafts and pashminas among others from Nepal.

On the other side, Bangladesh has granted access to Nepal to use the port facilities in Mongla through Kakarbhitta-Phulbari-Bagnlabandha transit route in 1997. Earlier in 1978, Nepal-Bangladesh Joint Economic Commission (JEC) was set up at the Ministerial level. Equally, both the nations have been enhancing cooperation in joint ventures like banking, finance and insurance. Also, both the nations have been enjoying trade initiatives such as readymade garments, leather items, pharmaceuticals, and PVC pipes among others. Both the nations’ tourism industries have been benefitting because of direct air connectivity and people-to-people contacts. The data shows that about 24,000 Bangladeshi tourists have visited Nepal in 2016 while it was nearly 17,000 in 2010. Meanwhile thousands of Nepali students have been pursuing their higher studies in Bangladesh. It is highly appreciable that Bangladesh offers numerous seats to the Nepali students in different discipline including Medicine and Engineering education. Nepal-Bangladesh relation is also enhanced to mutual satisfaction which covers broader areas such as technology transfer, cultural connection, tourism, knowledge transfer, scientific and technological spheres among others.

According to the government sources, Bangladesh has expressed its willingness to purchase 500 MW electricity right immediate, for which Nepal government has already signed bilateral Memorandum of Understanding (MoU) with Bangladesh. However, the present needs of electricity in Bangladesh is said to be about 60,000 MW. Bangladesh is planning to purchase 9,000 MW of electricity from Nepal by 2040. Meanwhile, Bangladesh has aimed to geared-up its status to developed country by 2041. To meet this target, it has to increase the economic growth rate, for which it requires additional amount of energy. The private sectors from Bangladesh have also shown their willingness to invest in hydropower project with the capacity to generate 6,000 MW of electricity in Nepal which is expected to contribute on this requirement.

Bangladesh and Nepal both can benefit through energy sharing for which long term bilateral mechanisms have to be devised. Since, Bangladesh and Nepal are not having direct land connection, the transmission lines have to be linked via India through the shortest route. For this, both Nepal and Bangladesh have to seek for tripartite agreement with India. This trilateral relation, among the SAARC member nations, would not only explore potentials in energy sector, it would help enhance trilateral trade, commerce, economy and diplomacy. Since, Bangladesh has maintained good relation with both Nepal and India, the effort from Bangladesh for tripartite agreement would also remain highly meaningful. Yet, both Nepal and Bangladesh have to maintain good trade relation with India because of their geo-political proximity and cultural affinity. After all, India will benefit greatly by enhancing good trade, economic, diplomatic and political relations with its resourceful neighbors.

Bangladesh and Nepal both have huge potential of resources and trade, social and cultural capitals, and soft powers which need to be (re)assembled, cashed and exploited through soft diplomacy. Yet, both Bangladesh and Nepal are having asymmetric relations with their bigger neighbors. Thus, they have to enhance their trade relations through glocalization– localization of trade by integrating with globalization of markets. They both have to integrate their economy with the economy of their neighboring economic giants through regionalization, first. They have huge market in their territorial surroundings. They can benefit by integrating their economy with China’s Belt and Road Initiative (BRI) project as well. While both Bangladesh and Nepal have already became the soft partner of BRI. The BRI could be a huge platform for both to integrate their economy through regionalization process which will greatly contribute to boosting their economy. They, however, have to enhance connectivity, trade and investment, energy and resource sharing, technology and knowledge transfer, tourism and cultural connection among their immediate neighbors; meanwhile they have to project an idea of sustainable high tech security and economic architecture within various regional frameworks.

Certainly, President Hamid’s visit will herald new dimensions in Nepal-Bangladesh relation. Meanwhile, both the governments have to comprehend their national interests through the means of economic and soft diplomacy. The sincere and cordial relations featuring between Bangladesh and Nepal have to be maintained and continued with amity of trust, friendship and respect. The trade and commercial relations between the two friends have to grow steadily in the years to come by preserving the historical legacy. Further, the volume of trade between the two nations has to be increased following the diversified potentials. Given that the member states of organizations- SAARC, BIMSTEC and BBIN among others do not trade as much with each other as they do with rest of the world. The greater trade diversification needs to be sought through inclusive trade, commercial and diplomatic mechanisms. More importantly, both the nations have to focus on South Asian Free Trade Agreement and push the SAARC for South Asian Fair Trade Agreement by resuming the stalled SAARC process which can go long way.

GP Acharya, who holds an M.Sc. in Computer Science, M.Sc. in Statistics, completed M.A. in International Relations and Diplomacy, and studied MPhil in Management, is a researcher and analyst based in Kathmandu, Nepal.

Twitter: @GPAthinker

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