Mashfee Binte Shams, the Bangladeshi Ambassador to Nepal, is going back to her country after six years in Nepal. As her tenure draws to a close, Biswas Baral and Kamal Dev Bhattarai talk to her about her impressions of Nepal, SAARC, geopolitics and bilateral trade.
You have been in Nepal for a long time. What has struck you the most about the country?
I have been here during a very important time in Nepal’s political history. You adopted a new constitution, and you completed a long political transition from monarchy to democracy. Experiencing this transformation in Nepal has been interesting as an outsider. My second takeaway from Nepal is that it is a really resilient country. There was the earthquake and there were so many other upheavals but people are still so optimistic and hard-working.
Could you point to some notable commonalities between Nepal and Bangladesh?
We have a shared vision of prosperity. Over the past decade, Bangladesh has made great strides in development. We are today the 39th largest economy in the world, with a per capita income of almost $2,000. We completed in 2018 the required process of graduating from the ranks of the Least Developing Countries (LDC). Our social-economic transformation has been huge. But we can also identify with Nepal, whose social-economic challenges such as women empowerment, literacy, health care, and even drinking water are common with Bangladesh. Another new common challenge is climate change or global warming. Both countries are vulnerable to the effects of climate change even though neither is a contributor to global warming or greenhouse gas emissions.
What has been the progress on the much-touted power trading between Nepal and Bangladesh?
The power trade between Nepal and Bangladesh should have started much earlier. You have such a huge potential and we have a huge demand. Even today, Bangladesh produces over 21,000 MW as it is a fast-growing economy with over 8 percent annual growth. So we need a huge amount of electricity, around 34,000 MW by 2030. Right now, we produce energy from coal, thermal, gas and other sources. We want to shift from that to more renewal sources. Hydropower is the greenest and most renewal source and we are thus looking to import power from Nepal. In 2018, the two countries signed a Memorandum of Understanding on power trade. Under that MoU some mechanisms for regular consultations are in place. Hopefully, something can be worked out soon.
You say the power trading should have happened much earlier. What was the hindrance?
You were unprepared in many ways. Some of your power projects were just coming online. You had a power deficit. Even now, Nepal is importing power from India to meet your domestic demand. In the past, you were not in a position to export power to any country, including Bangladesh. From this monsoon, Nepal is going power surplus, which creates an ideal environment for us to import power from Nepal.
Regarding power cooperation, we need the consent of India via which the transmission lines will run. Has India been cooperative?
There has been a satisfactory process on this. All impediments have been removed. I think there are no legal barriers to take electricity from Nepal to Bangladesh via India. Of course, the details will have to be worked out. Similarly, on the GMR project of Upper Karnali, Bangladesh is in the final stage of purchasing power. That will build a foundation for us to import electricity from other projects in Nepal.
You mean there are no obstacles from the Indian side?
You must have seen all legal acts and regulations, and the problematic ones have been amended. Yes, I think all obstacles have now been removed.
Less than 30 km separates Nepal and Bangladesh. Yet the volume of trade between them has been dismal.
I have talked to everyone here. The chambers of commerce, and all the business people, right down to the grassroots. The problem is a lack of interest on both sides. Businesspeople in Bangladesh think of Nepal as a very small and hence an unprofitable export market. They think Nepali markets are dominated by Indian exports. So our business people were not interested. In the case of Nepali people, they think Bangladesh is a poor, starving, poverty-ridden country which does not have purchasing power. Many don’t realize that Bangladesh today is not what it was 40 years ago. As I mentioned earlier, our purchasing capacity is more than $2,000. We have a 50-million-strong middle class, which is huge. Only now have some Nepali businessmen started exporting to Bangladesh and they complain about tariff and non-tariff barriers, which I think is encouraging. This means they want to export. Given this, we can work together to remove some of the difficulties.
The President of Bangladesh visited Nepal last year. What role do these high-level visits have on enhancing bilateral ties?
Definitively, high-level political exchanges help create goodwill. We keep saying we are good friends and extremely close neighbors. Actually, after India and China, Bangladesh is your closet neighbor. If we do not have exchanges between the political leaders, we lose contact and we become bound by rules and regulations. Only when we have direct discussions can we talk to each other about our problems and issues, and resolve actual problems and clear misperceptions. You have a perception in Nepal Bangladesh is blocking Nepali products, whereas I want to categorically tell you that there is no blockage of Nepali exports as such. Whatever rules and regulations Nepali exporters have to follow also applies to other exporters to Bangladesh. As we are importing from many other countries, why wouldn’t we import from a close friend?
Where does Bangladesh stand on SAARC?
For regional cooperation to work, countries should be ready to sacrifice or be flexible in areas of possible cooperation. For instance, let’s forget SAARC. We decided that Bangladesh, Bhutan, India, and Nepal would get together and sign a motor vehicle agreement. That made sense as these four countries are physically close and have similar problems. It makes sense to cooperate to ensure more economic integration. But where is the BBIN motor vehicle agreement today? It was signed in June 2015 by four countries, but Bhutan could not ratify it. Even the three signatory countries Nepal, India, and Bangladesh should have moved ahead but we have been unable to do so. The eight-country SAARC is a lot more diverse. Without some flexibility from participating countries, no regional organization can function well.
Does Bangladesh support India’s desire to push BIMSTEC instead of SAARC?
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation is not a replacement for SAARC as two regional bodies have different objectives and areas of operations. SAARC brings together the countries of the region that were closely integrated before the British came here and created artificial divisions. Before the British arrived, the region had many principalities and kingdoms but we were integrated and there was a lot of internal trade. So SAARC tries to revive that pre-British integration.
Whereas BIMSTEC is about promoting trade between the two economic regions of ASEAN and South Asia. So one cannot replace the other. Bangladesh always backs any sort of regional, sub-regional, or multilateral cooperation. It is our core foreign policy objective to have greater regional integration and promote cooperation as we believe no country can develop in isolation. The region must develop together. A situation of one country going very fast, another country lagging behind would lead to regional instability. Regional cooperation is hence the core foreign policy objective of Bangladesh. It could be achieved through SAARC, BBIN, BIMSTEC or any other organization.
Both Bangladesh and Nepal seem to be having a tough time balancing the interests of big powers like India, China, and the US. Can you tell us a bit about the Bangladeshi experience?
Bangladesh is very open and we do not see it as balancing one against another. We are open to cooperation with everybody. In 2016, we signed an agreement with China to bring in over $17 billion in investment. India is also a very important trading and investment partner for us. Likewise, the US is our biggest destination for readymade garments. Cooperation with one country does not mean you cannot cooperate with the other. When Bangladesh was born, we had nothing, everything was destroyed. We had no industries, no agriculture, no infrastructure. Becoming the 39th largest economy in the world was a massive challenge. By 2030, we will be the 26th largest economy. So we do not want to pick and choose.
Any advice for Nepal on how to maintain a successful balance?
I am not here to offer advice to Nepal. Talking about Bangladesh, we now have self-confidence which allows us to make these decisions more pragmatically. We are not influenced by what you call big powers. I think national confidence is very important. For example, in 2013 we planned a bridge across Padma River, in what would be one of the largest infrastructure projects in Bangladesh. The bridge would connect Dhaka to South-Eastern Bangladesh, a detached and deprived area. We went to the World Bank and the Islamic Development Bank and JICA for funding. The World Bank decided not to fund the $3 billion project. Finally, our prime minister said we do not want your money. She said we will do it with our own funds. Now Bangladesh is building this huge infrastructure on its own. That has given confidence. Now, there is national confidence that we can do big things on our own.
As you pointed out, Bangladesh is now growing at above 8 percent annually. Any secret sauce Nepal could also use?
I strongly believe that we all have our own paths to follow. What worked in Bangladesh may not work in Nepal. There is no way to say that we followed this and you should be doing that. In Bangladesh, we have highly motivated entrepreneurs, which helped with the establishment of a robust readymade garment sector. The government brought supportive rules and laws. The government also introduced special incentives in agriculture, as Bangladesh was food-deficient for a long time. Now we are self-sufficient in food. In fact, we are also exporting rice and the government is even giving subsidies in rice export