The 34th anniversary of the liberation of Dhaka and the creation of Bangladesh on December 16 is an occasion for concern and deep introspection about the nature of the internal turbulence in that country and the related implications for India.

It may be recalled that prior to December 16, 1971, what is now known as Bangladesh was East Pakistan and for almost 24 years from August 1947, the military leadership of Pakistan treated the eastern part of the country as a poor relative.

Years of neglect and exploitation peaked in 1970 when the late Sheikh Mujibur Rehman emerged as a credible political alternative to the West Pakistan political elite but the then Pakistan Foreign Minister Zulfiqar Ali Bhutto stoked the flames of sectarian identity pitting the Bengali Pakistani against his peers in West Pakistan.

Under normal circumstances, Sheikh Mujib, who had won the national elections, ought to have been nominated as the Prime Minister of Pakistan but the Western part of the country was determined not to let power slip from its fingers and thus began a gory cycle of repression and killing of the citizens of East Pakistan by their own military. Local resistance to such oppression and political intimidation grew under Mujib and the Mukti Bahini and while it was potent, it could not prevent the genocide that followed.

By the time of the liberation of Dhaka in December 1971, almost three million citizens of East Pakistan were victims of mass killing and rape. The global community, led by the US, alas, chose to be silent spectators and this will remain one of the more shameful chapters of the Cold War decades.

India was drawn into the developments and had to deal with a challenge of 10 million refugees from East Pakistan seeking shelter in the country. It was a daunting task by any stretch of imagination. And with no help from the global community, India was able to provide succour and moral support that later led to Delhi being drawn into the war that followed.

The 1971 Indo-Pak war finally led to the surrender ceremony in Dhaka where the Pakistani military leadership accepted defeat, which resulted in the birth of Bangladesh. The political geography of the sub-continent was re-drawn after August 1947 and it was irrevocably established that religion alone could not be the basis for national identity and that in this case, ethnicity, language and a deeper socio-cultural preference had to be acknowledged. Pakistan was dismembered in two and its military had the dubious distinction of the blood of three million of its own citizenry on its hands.

India may have scored an emphatic military victory in late 1971 but the political gains that should have normally accrued seem to be more elusive now 34 years after the birth of Bangladesh. Friday, December 16, will be suitably commemorated in India as the first Vijay Diwas (the second was Kargil in the summer of 1999) and hopefully the Unknown Soldier who symbolises all those Indian 'faujis' who laid down their lives for country and flag will be remembered. This is also an opportune moment to take stock of the trajectory that the new nation- Bangladesh - has taken in the last four decades.

Today, Bangladesh stands at a crucial fork. It has a population of almost 140 million and in the last two decades, an assertive and militant constituency in the country has sought to define itself more as an Islamic state with the liberal Bengali identity being relegated to the background. Internecine political rivalry has seen the military and the mullah being co-opted for short-term opportunistic gains and this trend has been further exacerbated by the prevailing post 9/11 international undercurrent which unfortunately pits Islam against the US-led West.

With its large population base and impoverished socio-economic profile, Bangladesh has become a safe haven for nurturing religious extremism and jihad by groups whose origins lie in Pakistan-Afghanistan and parts of West Asia. The ambivalent attitude of the ruling party-the BNP led by Begum Khalida Zia – appears to be emboldening the local terrorist groups.

Consequently, the country has been subjected to a series of terrorist-related events this year, the most dramatic being the 434 simultaneous bomb blasts across the entire country on August 17. The months that followed witnessed concerted attempts to attack the judiciary and the symbols of state, such as police stations and courts, and the most recent was the suicide attack on December 8 in two towns that resulted in the death of six people with almost 50 injured including policemen. The banned Jamatul Mujahedin Bangladesh (JMB) has claimed responsibility and the group has also distributed literature demanding that the government introduce the Islamic code and has warned women not to be seen without veils.

In the past, right wing groups have threatened to convert Bangladesh with its liberal, tolerant ethos into a Taliban clone and this has led to considerable internal dissonance. The socio-cultural ethos of Bengal which predates its modern political history beginning with the early 20th century is now being challenged and much of the future course of events will depend on the degree to which the major political parties are able to join hands in strengthening the liberal spectrum in Bangladesh civil society.

The fork that Bangladesh is poised at and the direction it will take will have significant implications for the internal stability of its own society and for regional stability as well. Currently it has a GDP of US $ 57 billion and a growth rate of 5.5 per cent. It has shown encouraging signs by way of increasing its share of services and manufactured goods towards GDP growth while agriculture has reduced.

Its work force has shown commendable empathy for trade in areas like textiles and IT and, most importantly, Bangladesh has visibly demonstrated that it can be a tolerant Islamic society in the main. The country's development indicators including family planning and female literacy are impressive by South Asian standards and its NGO sector is robust-though it is ranked among the most corrupt states by way of the governance index.

In short, despite certain constraints, the country is well positioned to consolidate its advantages against the backdrop of globalisation and its resources such as natural gas could be harnessed in a positive manner. But none of this will fructify if the polity is internally fractured over religion and 'adversary' and what constitutes the abiding national interest. The experience of Pakistan and its own tragic trajectory where the military and the mullahs entered into an unholy alliance to stoke a distorted version of Islam and the interpretation of 'jihad' are case in point.

It is obvious that a stable, prosperous and moderate Bangladesh would be in India's long-term interest. The anxiety about illegal immigration into India is real but it can only be meaningfully addressed when the internal situation in that country is conducive to the retention of its people. As the 34th anniversary of the Liberation War approaches, both state and civil society in India and Bangladesh would be well advised to ponder over these complex linkages and evolve an appropriate long term strategy that would advance their respective national interest in a complementary and consensual manner.

The resignation of Prime Minister Ariel Sharon from the ruling Likud party in Israel has set off reverberations not only within Israel but at the regional level as well. Many Israelis and Palestinians, both politicians and scholars, believe that Sharon’s decision to leave the Likud has brought about a political earthquake that could realign not just the political configuration within Israel but also have a significant effect on the peace process. His decision to leave the party ensued following intense opposition from fellow Likud members over the unilateral disengagement plan, which he had originally conceived. The plan witnessed the evacuation of over 8,000 Israelis from 21 settlements in the Gaza Strip and hundreds more from four settlements in North West Bank in mid-August, leaving the Gaza Strip under the limited authority of the Palestinians for the first time since 1948. In addition, the decision of the new Labour leader Amir Peretz to withdraw his party from the National Unity government also acted as a catalyst, thus hastening the next parliamentary election to March 2006.

The domestic political turbulence in Israel, coupled with suicide bombings, violence, and pandemonium within the Palestinian political arena, has left the peace process, or what is left of it, in shambles. The result of the next Parliamentary elections should, however, provide an indication as to the contours of any future peace deal between the Israelis and Palestinians. Thus, Sharon’s political manoeuvring calls for a deeper understanding of Israeli politics, leaders and trends as well as a relook at some of his past actions. He was responsible for the establishment of the settlements, was a co-founder of the right-wing Likud party, was the mastermind behind Lebanon’s invasion, and was also held indirectly responsible for Christian militiamen massacring Palestinians in two refugee camps. However, by tempering his extremist policies in the past few years, he has tried to cater to national as well as international interests, thus validating the contention that the reasons for disengagement go beyond merely security concerns. Sharon’s domestic compulsions include demographic concerns about the emergence of an Arab majority within Israel, which would undermine the very essence of the Jewish state. In addition to this was the high cost of sustaining the settlers and maintaining the military presence in Gaza.

As expected by Sharon and his supporters, the security situation has not been very stable after the August disengagement. September saw increased hostilities between Hamas and the Israeli Defence Forces, confirming the fears and reservations of those sceptical of the plan’s success. These reservations eventually culminated in intra-Likud dissent and to Benjamin Netanyahu challenging Sharon’s leadership of the party. Though Sharon emerged the winner in this contest, continued opposition eventually forced him to leave the party and form a new one of his own.

Kadima: The March Forward

The name of this nascent party, Kadima (forward), itself suggests that Sharon has defined its objectives very differently from those of the Likud. His centrist party aims to move away from the original Likud right wing extremist thinking, which includes blocking any further future withdrawals. And though Sharon himself has reiterated that there will be no further withdrawals, there is a sense that there could be some form of territorial compromise in the future in the process of striving for his goal to “lay the foundation” towards the “final borders of the state.”

Sharon’s decision to quit the Likud could also be interpreted as sending a signal that he has transformed himself from an extremist to a moderate politician. In other words, he quit the party because its policies and beliefs were constraining his ability to work towards a peace process as envisaged by him, through which he wishes to emerge as the leader who at last defined Israel’s borders. Additionally, Sharon was unhappy about leading a party that was ridden by dissent and constant struggle. His continued stay in the Likud would have made him a hostage to the policies of either the Left or the Right.

A public opinion poll conducted subsequent to his resignation by the Israeli newspaper Haaretz suggested that Kadima would win about 37 seats and the Likud Party reduced to a mere nine seats in the next parliament. This highlights the shift in Israeli public opinion: from considering the idea of a Palestinian state as a taboo initially, to understanding the risks and dilemmas involved in occupying Palestinian territories, and finally accepting the ‘two-state’ option. Israelis believe that Sharon is one leader who could forge a deal with the Palestinians without at the same time compromising on Israel’s security.

However, Sharon’s political agenda of territorial compensation does not imply that a future peace agreement will involve Palestinians and their interests. The ongoing construction of the fence, building of new houses in settlements like Maale Adumim (in West Bank), and the E1 corridor connecting this settlement to East Jerusalem and eventually encircling it, controlling Gaza's borders, coastline, and airspace and retaining the right to re-enter the Palestinian territory anytime at will clearly highlights the unilateral character and maximalist nature of Sharon’s political agenda. By sidelining core issues like borders, the status of Jerusalem, right of return, settlements, etc., which are the main bone of contention, Sharon’s purpose seems to be, to place the peace process in “formaldehyde.” Even the latest effort in peacemaking i.e. the Road Map has been consigned to oblivion by incessant violence and the exclusion of core issues from the negotiations.

Sharon’s Challenges: Securing Insecurities?

But Sharon faces a difficult path to tread upon, as some of the challenges he faces include garnering enough support from other parties to form a coalition government led by Kadima, while at the same time attempting to change the trend of Centrist parties not performing too well in Israeli politics. In addition, he has to deal with his Palestinian counterpart Mahmud Abbas along with the ever-looming threat of Islamic fundamentalist groups like Hamas and their decision to enter the political fray. As an Israeli political commentator has stated, Sharon will have to “successfully use the Palestinian Authority’s inability to dismantle the infrastructure of terrorist organizations and the rising political power of Hamas to resist pressure that may develop for a rapid and unsatisfactorily deal.”

These challenges have definitely been made a little easier by the support offered by Shimon Peres, the grand old man of Israeli politics and the former Labour leader, who joined Sharon and is backing him in his political endeavours. Thus, the next parliamentary elections will see three parties contesting i.e. the Likud, the Labour and the Kadima, in which the Labour party under Amir Peretz will stress on socio-economic issues, the Likud on an equal trade-off deal of land for peace with the Palestinians, and Kadima on preserving the Jewish majority within a democratic Israel. Here it would be pertinent to note that the difference between the Likud and Kadima is not over ideology but about the manner in which Israel’s security concerns have to be addressed; in effect, they advocate similar goals but through different means.

On the Palestinian side, Sharon’s resignation was perceived, in the words of the chief Palestinian negotiator Saeb Erekat, as “a volcano erupting.” But for the Palestinian man on the street, it matters less at this point of time whether the Likud or the Labour rules. What is more important is the time frame for, and the nature of, a future Palestinian state. The recent suicide bombings by the Islamic Jihad only reaffirms the fact that the peace process will continue to witness violence even as political negotiations carry on simultaneously.

The disengagement, Sharon’s decision to resign, formation of Kadima, Likud’s projected bleak future simply revisits the debate over politics continuing to dominate security and will have an adverse effect in the region. If Sharon were re-elected as the Prime Minister then one would witness the continuation of his policies. If the Labour comes to power under Peretz then security concerns would take a backseat to socio-economic issues. And Netanyahu as Prime Minister would definitely rule out any territorial compensation in the West Bank and adopt more stringent means towards the Palestinians. However, the result of the elections in March 2006 cannot be accurately predicted despite Sharon’s prevailing popularity, since three months are a long time for opinions, perceptions and leaders to change in Israel. One can only hope that the ongoing violence and political turmoil does not portend more tumultuous times ahead for the Israelis as well as Palestinians.

The 13th SAARC summit concluded in Dhaka on November 13 with a declaration, which notwithstanding its rhetorical flourish and ambitious objectives, reflected the structural constraints that have hobbled the organization for two decades and are likely to do so for the near future. SAARC which was conceived in Dhaka in 1985 returned to the Bangladesh capital after 20 years but the primary objective of strengthening regional co-operation with a focus on accelerating economic growth, such that the human security indicators and welfare of the people are visibly improved remains as elusive as it was two decades ago.

Much of this stasis emanates from the distinctive characteristics of SAARC as an entity and the existential reality that India is both the link to all the other members in a geographic sense and overwhelms the rest of the group in more ways than one. Consequently there is a deep-seated anxiety and historical animosity among countries such as Pakistan, Bangladesh and Nepal whose elite have nurtured a socio–politico and security discourse for decades, that casts India in the role of the historical 'enemy' or potential adversary as the case may be. Sri Lanka, Maldives and Bhutan represent a more positive texture vis-à-vis India and they have individually strengthened their bi-lateral ties with Delhi and benefited in the process.

Hence the domestic discourse and perception in one spectrum of SAARC is that trade and economic co-operation can only follow the political orientation towards Delhi and this was much the tenor of Pakistani PM Shaukat Aziz's response when at the end of the Dhaka summit he noted that unless Kashmir is resolved, there could be no meaningful movement on other forms of regional co-operation envisaged by SAARC. The historical irony is that in 1947, when the sub-continent was acquiring a new political identity post partition, the prevailing international global trade arrangement – GATT – noted that given the economic and trade complementarities that existed and the natural rhythms of commerce that had been embedded for centuries, a separate provision was made for India and Pakistan – which then had two wings – West and East Pakistan (later Bangladesh after 1971). Article XXIV of GATT noted at the time that: "Taking into account the exceptional circumstances arising out of the establishment of India and Pakistan as independent states and recognizing the fact that they have long constituted an economic unit, the contracting parties agree that the provisions of this agreement (GATT) shall not prevent the two countries from entering into special arrangements with respect to trade between them, pending the establishment of their mutual trade relations on a definitive basis."

The historical record suggests that the ruling elite in Pakistan and later Bangladesh have worked towards the opposite objective – which is to steadfastly reject any form of mutually beneficial bi-lateral or multilateral trade arrangement with India and hence both SAPTA and SAFTA remained congenitally stillborn or effete. The blunting of economic opportunities on the political anvil and the converse example are reflected in the trajectories of SAARC and ASEAN respectively in the period 1980 to 2003. Total merchandise exports within the block – US $664 million (1980) and $4,773 m (2003) for SAARC and $13, 350 m and $104, 872 m for ASEAN. These export figures represented 5.2 per cent of total block exports in 1980 and declined for the next two decades to 4 per cent and is now 5.6 per cent in 2003 for SAARC. Intra block exports for ASEAN on the other hand moved from 18.7 per cent to 23 per cent in the same period. With ASEAN poised to engage with the East Asian bloc in a more structured manner, it is axiomatic that there will be greater economic impetus and vitality to that entire region and the tenet that sound economics can be separated from contested politics is best exemplified in the case of the strong Sino-Japanese trade and investment links and in the even more remarkable China-Taiwan relationship.

Regional trade arrangements (RTA) have grown six fold the world over, in the last quarter century to the mutual benefit of all the constituent members and in many ways SAARC is the stubborn exception to the rule. However the silver lining in the SAARC experience is the nature of the bi-lateral trade arrangement among some states. The best illustration is that of the India-Sri Lanka Free Trade Agreement that was signed in late 1998 and brought into force in early 2000. Despite the turbulent political context relating to the IPKF experience when Delhi and Colombo were at cross-purposes, the political leadership in Sri Lanka arrived at a consensus that the island's economic future would be better served by closer links with giant India.

The trade and economic figures of the last 15 years more than substantiate this conviction. Sri Lanka's exports increased from US $2.3 billion in 1990 to $6.5 billion in 2003 and currently Sri Lanka has the highest per capita GNP within SAARC at US $930. (India, Pakistan and Bangladesh have per capita of $540, 520 and 400 respectively). The tangible benefits for a smaller economy which enters into a RTA with a larger partner are discernible in the disaggregated figures of GDP in the case of Sri Lanka. While GDP moved from $8.03 b in 1990 to $18.23 b in 2003, the share of agriculture dropped from 26 per cent to 19 per cent while that of services increased from 48 to 55 per cent. (All figures from World Bank WDI Report 2005.)

On current evidence despite the Dhaka Summit determination to bring SAFTA into force by 01 January 2006 – which is less than two months away – it is more likely that SAARC will be weighed down in reaching procedural consensus since there is little or no political will among the major states to engage with India. The only significant movement in Dhaka has been in expanding SAARC to admit Afghanistan and this has not been devoid of deeper political considerations. Nepal ensured that the admission of the new member was linked to the observer status of China (and Japan) in SAARC. However the impact of the two Asian economic heavyweights on the SAARC bloc will be a function of the manner in which the bi-lateral relations that obtain between Delhi and Beijing develop.

Thus despite pious and earnest hope, the irrefutable logic of regional economic co-operation will be stunted by the glass ceiling of domestic political discourse in SAARC and the troubled legacy of revisionist colonial history that is still burdened by the cross of 1947.

Last week witnessed a major development on the India-China energy front with the joint bidding plan for Petro-Canada's Syrian assets by India’s Oil and Natural Gas Corporation (ONGC) and the China National Petroleum Corporation (CNPC). In September this year Petro-Canada expressed interest to sell off its 38 per cent stake in the Al Furat field, which produces about 70,000 barrels of oil daily accounting for 50 per cent of Syria's total output. This is the first time that Indian and Chinese firms have joined together to secure stakes in an overseas energy facility. In overseas bidding efforts since 2004, Indian firms have faced competition from Chinese firms and in three different instances India lost to China in the race to secure overseas hydrocarbon assets. Angola was the first instance, where India bid for 50 per cent stake of Shell in Angola's Block 18 field. In the $600 million offer, India had promised to include $200 million to support Angola's ongoing railway construction project. This was outbid by China with a $2 billion offer. The bidding competition again surfaced when India wanted to buy the stake of Petrokazakhstan — a Canadian oil firm operating in Kazakhstan. In this case as well, China won the deal by offering $4.2 billion to Petrokhazakhstan against India's offer of $3.9 billion. The third incident was in the case of India's energy interest in Ecuador, where India and China competed for Encana's stakes. China proved to be the winner in this race as well.

Different perceptions exist regarding India-China bilateral relations, but most analysts overwhelmingly reject any scope for cooperation between the two countries on the energy front. Many scholars see energy resources as a common interest of both the countries and contend that the search for energy would lead to competition and eventually to conflict. But these perceptions have to be studied in a broader framework to understand the possibility of any such unhealthy competition. First, most such conclusions are made on the basis of the historical experience of the 1962 conflict as well as China's military inclination towards Pakistan. These perceptions play a major role while defining and dealing with any major issue between the two countries. However, the bidding and outbidding instances have to be seen purely in a commercial sense and not as political competition between the two countries.

After the Angola incident itself both sides realized that there is a greater scope and necessity for cooperation in their future search for overseas energy. This thought has crystallized into bilateral meetings and exchanges of visits. In August 2005, a high level team led by Mr Talmiz Ahmed visited China, and another high-level visit is expected to happen in mid-January 2006 primarily to study the scope for cooperation. Cooperation between the two countries would have far reaching implications on the global energy market. First, by pooling financial and technological resources, such a joint venture would become one of the largest state-owned bilateral joint energy efforts to address the energy security issues of two major energy consumers of the world. Secondly, in the coming years, more joint ventures may emerge from other import dependent countries or an Asian regional effort may form under the leadership of India and China. Third, this might adversely affect energy producers who are waiting to encash on the competition between India and China. Many energy watchers have pointed out that Russia and Bangladesh have been trying to gain advantage from India-China competition. Both India and China have shown interest in buying a 20 per cent share in Yuganskneftgaz (a Yukos subsidiary expropriated by the Russian government). Bangladesh is also angling to benefit from the India-China competition for natural gas. Although India is geographically closer, Bangladesh has been showing interest in exporting natural gas to China, in an attempt to increase its bargaining value. These kinds of producer politics would be hard to play if India and China decide to go ahead with their joint search for energy. Fourth, joint efforts would also help to bring down the stake values, as it has been seen that in the name of competition China has paid considerably higher value for its overseas equity purchases.

Taking the relevance of energy security in the current global sense and the growing energy demand of India and China, it would be mutually beneficial for the two countries to cooperate and work together in their quest for energy. The primary areas of possible cooperation are:

• Most energy exploration and development projects around the world require large-scale investment and technology. Joint efforts by the two countries in pooling their investments and technology would yield better resource outputs.
• Hydrocarbon transportation route — oil and gas pipelines — is another area of possible cooperation, where they can bring energy through the shortest possible routes with minimum investment cost.
• As China gets most of its hydrocarbon supply through the Indian Ocean SLOCs, it would give considerable importance to cooperating with India to ensure the security of is supplies.
• India's Sakhalin gas production shares can be swapped with Chinese supplies from the Middle East, which would enable both countries to reduce the transportation distance and cost.
• India and China would be able to bring together other imported energy dependent Asia-Pacific countries, which can act as a peer group to harness the growing energy price, and demand the removal of Asian Premium charged on every barrel of oil exported to the Asia-Pacific.
• As suggested by India's Petroleum Minister, Mani Shankar Aiyar, cooperation between India and China would be able to bring in a pipeline network to tap the Russian, Central Asian and Middle Eastern energy sources. In future this pipeline network can form a hub of energy supply to the other Asia-Pacific countries.
• As investments in renewable and nuclear energy in the region are expected to increase in the coming years, efforts to build up an 'Asia-Pacific cooperation' in this regard would help member countries address their growing energy demand.
• India and China can consider cooperating in the field of 'tar sand' exploration or gas hydrate exploration, as these would gain considerable importance as tomorrow’s major energy sources.

The scope for cooperation between India and China has to be explored further as there would be more mutually beneficial areas. The perceived competition between the two countries would not take off for many reasons. They have been working together for many decades to eliminate their past differences on political and territorial issues. Hence, neither side can afford to encourage the emergence of further differences or the persistence of extant irritants in the coming years. Moreover there are other challenges like the threat of US sanctions — regarding investments in Iran, where it is essential for both countries to cooperate politically and economically to ensure energy supply. The benefits that would accrue as a result of cooperation on the energy front between the two Asian giants are much larger than that of competition.