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Myanmar, Bangladesh and India: Prospects for Energy Cooperation

Guest article by Mirza Sadaqat Huda

As the world turns its eyes on reforms in Myanmar / Burma and investment rushes in, the opportunities and challenges of trade and peace-building with Myanmar’s neighbours to the West, Bangladesh and India deserve further study. In this guest article, one of my doctoral students, at the University of Queensland, Mirza Sadaqat Huda, who has extensive experience researching regional politics provides an overview of a pipeline project that holds much promise for energy development but remains deadlocked by the politics of bilateral expediency rather than multilateral cooperation.

Introduction

Since the end of British colonization, significant political and historical impediments have confined initiatives by South Asian countries to collectively tackle a number of growing non-traditional security threats, among them the crucial issue of energy security that threatens to hamper the economic potential of the region. The bureaucratic rut that eventually led to the shelving of the proposed Myanmar-Bangladesh-India (MBI) pipeline project in 2004-05, signified that political support takes precedence over all other prerequisites for the implementation of regional initiatives in South Asia.  Reiterating this notion, recent media reports have suggested that a revival of the pipeline is being considered by India and Myanmar bypassing Bangladesh, albeit at a greater economic cost and by sacrificing crucial political, social and security advantages that could be derived from the initial proposal of a tri-national project.

An analysis of the negotiations of the MBI reveals that the policymakers in all three countries have so far perceived the pipeline only as a means for transferring much needed hydrocarbons between international borders; the potential impact of cooperating on energy security via the MBI on often intractable political conflicts between the three countries, from skirmishes on the Bangladesh-India border to the Rohingya crisis in Rakhine and Chittagong, have not been properly incorporated within the strategic blueprint of the project. The need therefore, is to look beyond the immediate and obvious objective of achieving energy security, to the long-term implications of the MBI on regional stability, security and integration. This article aims to portray how the regional geopolitics of 2005, particularly Bangladesh’s relationship with India, resulted in the failure of the negotiations for the MBI in the past. It then makes an attempt to determine how current geopolitics is expected to influence the renewed interest in the project and how Bangladesh can initiate multilateral cooperation for the MBI, particularly through the proposal for a political roadmap.

The MBI Pipeline: A Brief Synopsis

The proposal for a gas pipeline from Myanmar to India through Bangladesh territory was first tabled in 1997 by the Dhaka-based private firm Mohona Holdings. This 900km, one billion dollar pipeline was meant to transfer an estimated 5 billion cubic metres of gas from the Swe field off the Bay of Bengal through the Rakhine State in Southern Myanmar, from where it would turn east to enter the Indian state of Tripura. The pipeline would then enter Bangladesh at Brahmanbaria and traverse the country till it exited at Jessore and terminated at the Indian state of West Bengal.

Pipeline proposed route that mitigates risk and cost (Source Irrawaddy online agazine open source image)
Pipeline proposed route that mitigates risk and cost (Source Irrawaddy online magazine open source image)

From its very inception, the MBI project suffered from political impediments.  According to media reports, although the governments of Myanmar and India had expressed strong interest in the project, successive Bangladeshi governments failed to either approve the project or reach agreements with partner countries. In January 2005, the BNP-led administration in Bangladesh signed a memorandum of understanding with Myanmar and India that relayed the respective countries’ intentions of cooperating in the energy sector. However in the heady days of the last decade, when Bangladesh was believed to be “floating on gas”, Dhaka was resolute enough to set forth three pre-conditions to allowing transit to the pipeline. The first was a customs-free passage through a land corridor to and from Nepal and Bhutan. The second was for a customs-free passage for hydro-electricity transmission lines to and from Nepal and Bhutan. The third condition put the onus on India to redress the trade imbalance between the two countries, which had historically been largely in India’s favour.

As could be predicted, India refused to comply with any of the above mentioned conditions and the negotiations of the MBI project reached an impasse from 2005 onwards. Analysts from India and the West have often portrayed Bangladeshi negotiators as belligerent and attributed their unrealistic demands to the collapse of the MBI project. Some national analysts have also questioned the rationality of Bangladesh’s adamant refusal to cooperate unless her conditions are fulfilled, since in addition to the option of retaining some of the gas, transit fees of an estimated $100 million per annum and an investment of $100 million would have greatly assisted the country’s economy.

If the negotiations of the MBI are analysed in isolation of other geopolitical issues, Bangladesh’s actions may be judged as unnecessary and intractable. However, the elements of a country’s negotiations regarding international cooperative ventures, in line with any other foreign policy exercise, are a reflection of geopolitical realities. These realities should thus be taken into cognisance when analysing Bangladesh’s stance on the MBI pipeline.

Bangladesh-India: Geopolitical Context of 2004-05 and the MBI

Bangladesh’s population of 160 million reside in an area that is 2/3 the size of the Australian state of Victoria and is surrounded by India on all sides, except for a small border with Myanmar to the east and the Bay of Bengal to the south. Although Bangladesh is the 8th largest country in the world by population, it feels small vis a vis India which has a GDP that is 12 times as much. India’s role in Bangladesh’s War of Liberation in 1971 was greatly appreciated and officially recognized by Dhaka but subsequent relations have been fraught with dispute, mistrust and misconception. Historically, the key problems between India and Bangladesh have been the demarcation of the land and maritime boundaries, the sharing of waters of the 54 common rivers, the ever expanding bilateral trade deficits, migration, border management and transit, among others.

Traditionally, the outcome of any negotiations between the two countries has been overly dependent on the political parties in power.  Although it needs to be contended that the BNP-led coalition which was in power in 2005 had in the past expressed significant reservations about cooperating with India, other bilateral issues also impacted Bangladesh’s approach. Firstly, in the early 2000s, Bangladesh was estimated to have as much as 2 trillion cubic metres of gas. As this grossly inaccurate estimate was widely accepted, the administration in Dhaka did not feel the immediate need to secure external means of supplies. Secondly, unilateral diversions of common rivers, and what is perceived in Bangladesh as indiscriminate killing of her citizens by the Border Security Forces (BSF) of India, were two sources of contention that particularly exacerbated Bangladesh’s sense of insecurity vis a vis her larger neighbour and influenced the intricacies of negotiations. In 2005, when negotiations for the MBI were underway, there were 269 reported incidents of abuses perpetrated by the BSF against Bangladeshi citizens, of which 104 resulted in fatalities. In addition, concerns regarding India’s river-linking project on common rivers and a bilateral trade imbalance of US$1534.78 million in 2004 contributed to an overall sense of weariness regarding relations with India.

On the other hand, India had several issues regarding Bangladesh, including allegations of illegal migration and North East Indian militants hiding in remote areas of the Bangladesh-India border. However, it does stand to reason that given the disparities in size and power and India’s apparent lack of interest in resolving bilateral issues, Bangladesh was compelled to attach the three conditions to allowing transit to the MBI. In retrospect, it can be perceived that each of the pre-conditions were an attempt to break free of what many in the country perceived as overt Indian influence and none of the  conditions had any direct or even indirect connection to the pipeline.

Bangladesh-India-Myanmar: Current Geopolitical Context and the MBI

The geopolitical realities which underpinned the negotiations of the MBI in 2005 have changed drastically in 2013. Firstly, it has been established that Bangladesh’s gas reserves have been largely exaggerated. Currently, there is no consensus on the estimate of gas reserves, but chronic under-supply caused by inefficiency of the local extraction practices have led the government to suspend piped gas connections to households and consider importing LNG or piped gas from neighbouring states.

Since the Awami League-led government took office in January 2009, there has been a significant improvement in Bangladesh-India relations marked by negotiations on a wide range of outstanding issues, including terrorism, border disputes, water sharing, transit and energy resources. Mostly importantly, several initiatives have been taken by India to reduce the trade imbalance and curb violence at the border including the use of non-lethal weapons. Despite this, Bangladeshis continue to be killed and injured by the BSF, albeit less frequently and certain issues such as water disputes and the implementation of several agreements have remained outstanding.

The democratic transition of Myanmar in 2010-2011 and the gradual opening up of its economy to the world has greatly altered the political landscape of the region. From the enthusiastic reaction of the West, it can be reasonably assumed that the current quasi-democratic administration in Myanmar is more likely to draw international approval, investment and technical expertise for the MBI than the military regime of 2005. Bangladesh, however, has significant bilateral issues of contention with Myanmar. The country is currently home to around 28,000 registered Rohingya refugees, housed in two UN High Commission for Refugees’ (UNHCR) administered camps in Cox’s Bazar, as well as another estimated 200,000 to 500,000 non-registered migrants spread throughout. Myanmar has not only refused to repatriate the Rohingyas but has even labelled this ancient Myanmarese community as illegal refugees from Bangladesh. Continued ethnic tensions have resulted in hundreds of Rohingyas to flee to Bangladesh as recent as June 2013. A perception survey undertaken by the Bangladesh Enterprise Institute and Saferworld in 2013 in Chittagong revealed that the continued influx of Rohingya refugees have caused severe strains on economic and environmental resources in South-eastern Bangladesh. As the situation for Muslims in general and Rohingyas in particular continue to deteriorate in Myanmar, Bangladesh must conceptualize innovative methods of negotiating with a recalcitrant Naypyidaw.

A Political Roadmap for the MBI

Although the pre-conditions tabled by Bangladesh in 2005 were the result of legitimate geopolitical imperatives, they were not directly related to the pipeline and were in fact not conducive to multilateral cooperation.  In reassessing the project, instead of insisting on pre-conditions, Bangladesh may stress on the need to create a political roadmap to the MBI. This would involve a declaration of the commitment by all three countries to meet certain goals and objectives that are directly or indirectly linked to the MBI project. These can consist of:

  • Agreeing to facilitate the completion of an independent Environment Risk Assessment that accurately reflects the ecological vulnerabilities of the terrain and the environmental risks posed by the project;
  • Respecting human rights in the regions through which the pipeline is meant to be constructed. This would involve adequate compensation of indigenous populations who would be forced to relocate or would otherwise be adversely effected by the construction of the pipeline;
  • Reserving a certain quota of jobs created by the project for the local population. This would be particularly effective in providing much needed means of employment to the Rohingyas in Rakhine. Job security can also assist conflict-prone North East India and the impoverished regions of Bangladesh;
  • Joint border patrols in Bangladesh-India, Bangladesh–Myanmar and India-Myanmar border areas. In addition to protecting the pipeline, this would enhance cooperation on border issues, reduce the number of people killed at the Bangladesh-India border and minimize the scope for the forceful pushing of Rohingyas into Bangladesh. Enhanced cooperation would also reduce the trafficking of drugs, arms and humans;
  • Enhancing the law and order situation not only in areas adjacent to the pipeline but also in the surrounding regions. One option could be to increase the capacity of law enforcement agencies by recruiting people from the locality. This would ensure stakeholder participation in securing the pipeline. While the overt purpose of a more prominent presence of law enforcement would be to protect international investment and infrastructure related to the project, it could also reduce the ethnic and religious conflicts that often spills over borders to adversely impact foreign relations;

Bangladesh does have a range of unresolved issues with Myanmar and India which require urgent mitigation. Despite this, the regional geopolitical realities of South Asia require tactful and astute diplomacy. Instead of demanding pre-conditions from India, it may be in Bangladesh’s favour to stimulate multilateral cooperation and consensus on the modalities of the project, which would on one hand assure her participation as a transit country and also give opportunities to resolve some of the issues it has with her neighbours by way of deliberately gauging the pipeline with such an objective.

Conclusion

Contemporary literature often substantiates the need for cross-border energy initiatives by emphasizing the intrinsic link between energy and economic development. In addition to providing much needed fuel for growth, the MBI must also be looked upon as a possible source of emancipation for the 288 million and 95 million people in India and Bangladesh who live without electricity.  For Myanmar, the MBI can provide an opportunity to showcase to the world its commitment to the rule of law, sustainable development and the emancipation and integration of ethnic minorities – elements that are fundamental to any modern democracy. Therefore, despite severe political and security impediments and a historical record of mistrust, Bangladesh, India and Myanmar should approach the MBI pipeline not only as a means to ameliorate the critical energy insecurity of the region, but also as a mechanism to build peace and stability and as an infrastructure of multilateral cooperation. By adopting a cooperative approach and political consensus on a roadmap, Bangladesh, India and Myanmar can look beyond the myopia of realpolitik that resulted in the stagnation of the project in the past.