India and Bangladesh Exchange 50,000 People, End Diplomatic Standoff

Last Friday at the stroke of midnight, India and Bangladesh exchanged 50,000 people and more than 160 pockets of land as part of a major land boundary agreement (LBA) approved by the Indian parliament in May. The Washington Post reports that the exchange was accompanied by cheering, dancing, and the lighting of firecrackers. The newly absorbed enclaves raised the flags of their new countries as people paraded down streets. In one village, they lit 68 candles and released 68 balloons, marking the nearly seven decades it took to resolve the border dispute between the two South Asian neighbors.

In January, Sebastian Brady and I took a deep dive into the history of the enclaves, which existed as separate administrative districts cut off from their home countries, stranding thousands of civilians in pockets of forgotten poverty without even the most basic of amenities. The Vatican may be the world’s most famous enclave, but the most numerous, until last week, were the 162 districts spread out along the Indo-Bangladesh border. After the Indian parliament finally passed the LBA, in June I explored how the case of the enclaves had contributed to the development of powerful legal doctrines in India.

In the end, this dispute was always most tragic in its human consequences. The lack of government services in the enclaves---many of which lacked electricity, health care, or schools---left residents stranded in poverty, uneducated, and basically stateless. In fact, more than 75 percent of the residents of the Bangladeshi enclaves have spent time in prisons for invalid travel---travel that was necessary to go to markets, schools, and even government offices. When the enclaves were traded on Friday, one father said, “we are very happy, our children will no more need to hide their identity to go to schools.”

Resolving the enclaves dispute also ends a political wedge that has limited cooperation between the two countries. The result of 68 years of isolation and poorly governed borders was the creation of areas that were ripe for smuggling, violence, and even terrorism. India’s restive northeast has long been underdeveloped and the country cannot bring it into the fold of prosperity without a broader regional security paradigm that reduces the risk of militant violence while boosting the economic connectivity essential to driving foreign investment and trade growth in both countries. For its part, instability along Bangladesh’s border regions has not only deterred Indian investment, but also undermined its prospects for becoming a regional hub.

As we wrote in January

Movement here could open the way for other significant agreements on trade and commerce, border markets, the sharing of the Teesta and other rivers, and a railway connecting Agartala and Akhaura. And all of this would pair nicely with Prime Minister Narendra Modi’s ambitious foreign policy, which stresses the benefits of greater economic ties.

It’s the second major boundary dispute with Bangladesh resolved by the Modi government and both countries have significant interests in building on the goodwill demonstrated over the last year. Critically for India, this neighborhood approach creates opportunities to turn back the influence of China in its near-abroad while also boosting trade and connectivity in South Asia. For a Centre for Policy Research (New Delhi) piece in 2013, I explored the potential benefits of a broader Indo-Bangladesh diplomatic detente, writing:

A continued positive relationship could foster increased Indian investment in Bangladesh, allowing it to exploit strategic gas reserves and end its electricity shortage. Further cooperation on water sharing agreements and hydro-electricity programs will benefit both countries, allowing them to decrease energy scarcity, diversify options, and expand production of exports in both countries. India has a strong incentive in the growth and prosperity of Bangladesh. As exports contribute to this growth, and subsequently, stability, it is in India’s interest that the development in Bangladeshi exports continues. India can aid in this effort by substantially increasing its imports of Bangladesh’s products. While the USD $1 billion line of credit granted in 2010 is an important step in this direction, this can only continue if political relations remain positive.

The Chittagong port can become a key driver of development in Bangladesh, as huge foreign investment could develop a strong service sector. Moreover, the development of transcontinental roads and railways through Bangladesh to India could offer both states immense economic opportunities. A mutual transit system could give Bangladesh a much shorter route to China, while linking northeast Indian states with Myanmar, Thailand, and Bangladesh itself. The Observer Research Foundation in New Delhi has estimated that expanding multilateral trade and investment in the countries transit system has the potential to add two to three percentage points to Bangladesh’s economic growth per year.

The two countries also have significant interests in continuing to collaborate in combating terrorism. If India is going to increase its control over its underdeveloped northeast, economic connectivity and enhanced integration with other regional actors like Bangladesh, Bhutan, and China is essential. India will have a much greater chance of success at maintaining peace in its northeastern states while developing them economically with Bangladesh’s continued cooperation, but Bangladesh also has a strong incentive to help India. Instability along the border regions of Bangladesh can serve to deter not only Indian investment, but signs of insecurity may also detract from other development and undermine the prospects of Bangladesh becoming a regional hub.

India’s aspirations as a regional and global power also compel its partnerships with neighboring countries. For India, signing the Teesta treaty would give connectivity to India’s northeastern states and provide a strong backing to its Look East Policy, which attempts to develop India’s trade and security relationships with Southeast Asian states. In addition, broader regional concerns regarding China’s advance into South Asia will drive continued investment. Chinese involvement in the development of Chittagong and other ports in Bangladesh is a continuing worry for India. China and India both lack access to natural energy resources within their borders and as the intensity of the search for these materials increases, competition for resources will continue to escalate. With access to naval bases throughout Southeast Asia and the Indian Ocean, some strategists in India believe China is encircling India through a “string of pearls.” In light of this, Bangladesh will remain a critical hub for overland Indian connectivity and regional development, and could profit immensely through trade and transit.

Then as now, India must lead the way in economically integrating South Asia. Resolving the humanitarian tragedy of the enclaves is another good step forward.