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Economist on Bangladesh : Is it purely bad journalism?

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I have been reading The Economist, a London based news magazine focused primarily on different aspects of Economics, for quite a while now. I really like the set of data they produce and visuals they create. Of late, I stumbled upon a news, which was more of a “misfit” with what the magazine dishes out in general. Citing a drop in labor recruitment from Bangladesh in Saudi, the reporter speculated whether that’s related to Bangladesh insistence on trial of War Criminals. The data they presented indeed show a sharp drop in Bangladesh nationals heading to Saudi kingdom. To rub salt in the wound, they also showed that the recruitment of Pakistani Nationals are still on and flourishing.

“Where before the ebb and flow of Pakistani and Bangladeshi workers were synchronised, their figures have since come unstuck. Bangladesh’s loss looks very much like Pakistan’s gain.”

The reason, it came up with, was purely political.

“Saudi Arabia silently disapproves of the imminent hangings of the leadership of the Jamaat-e-Islami, the religious party that serves as a standard-bearer for its strand of Islam in Bangladesh. …  It will not have escaped the Saudis’ notice that Bangladesh’s foreign minister likened the Jamaat, a close ally of theirs …”

However, it hardly showed any statements or formal communication to prove their point. There are multiple data points those directly indicate that the assertions Economist had made, are false.

http://farm3.staticflickr.com/2844/9573423818_751f75f126_o.jpg

Labor Migration to Saudi Arab – Regulations and Economics had Bangladesh down.

Let me accept the fact that indeed recruitment from Bangladesh has gone down to an unprecedented level. The similar data for Pakistan, India, The Philippines and Sri Lanka seems not to be touched by much. (To mention, Economist skipped the data for Pakistan in 2011 that showed a drop, why?) But whether it’s due to a political reason, is not at all indicated.

History of Bangladesh Labor Migration to Saudi Arabia

History of Bangladesh Labor Migration to Saudi Arabia

First, if you look at the history of Bangladesh labor recruitment in Saudi, it’s not a one-way drive up always. Several times recruitment from Bangladesh stagnated and it had little to do with the political story that the Economist is trying to sell. Last time when it fell between 2003-2005, Jamaat was an important ally in the ruling coalition in Bangladesh. So, the story of Jamaat leverage with Saudi affairs looks purely like a myth.

Next, if we look at what caused the nosedive of flow of Bangladesh workers in Saudi, we can find a few key points. First, Saudi Govt. introduced a legislation to limit nationals of a country, so that it does not become more than 20% in any sector and promoted more diversified labor recruitment strategies. Bangladesh, which supplied tons of workers in Agriculture and Construction sectors, ran out of quota. At the same time, Saudi Govt. changed the rules around minimum wages to allow immigrants to work in Saudi only if they earn $147 per month. A lot of poor Bangladesh labors, who fill in the cheap labor categories mostly (62% of worldwide Bangladesh immigrants are “less-skilled” as in 2012 and the number should be higher for those in Saudi), were cut off from entering the Kingdom due to the minimum wage requirements. And wait, all these legislation were passed in March, 2008 and effective from mid of the same year. Indeed, if you look at the graph closely, the numbers peaked in 2007 and started to drop in 2008. However, the current AL Govt came to power only in 2009 and announced its plan to set up a War Crimes Tribunal only in late 2008. So, how could a change in Saudi Law (which otherwise seems country-neutral) be caused by election manifesto in Bangladesh?

To elaborate, there are more regulations to come in Saudi. Recently, a legislation calls for $53 per foreign worker per month to be paid by his/her employer to Saudi Govt. It will definitely worsen the conditions of low-paid Bangladeshi workers in Saudi. Again, this has little relationship with War Crimes Tribunal in Dhaka but closely related to regulatory changes in Saudi.

Labor Migration to Oman - sharp rise for Bangladesh post-recession

Labor Migration to Oman – sharp rise for Bangladesh post-recession

Meanwhile, it is foolish to presume that Awami League leaders in Dhaka are sitting idle. They are working hard to fix the leaking boat to get the labor export back to where it was. They have a great success with Oman now recruiting tons of Bangladeshi workers and overall labor immigration to Gulf countries from Bangladesh looks to bounce back to the original pre-2008 levels. If we are convinced that Saudi downturn was pure Economics and nothing better could have been done by the Bangladesh Govt. to stop that, then the whole thing translates into a gain of Oman market only. In UAE, recruitment is back to the original level. So, how can we convince ourselves that Jamaat-E-Islami, that holds such power to take Saudi Kingdom beyond their pure rules of Economics and “teach a lesson” to the current Awami League Govt, holds absolutely no power in neighboring Islamic countries such as Oman and UAE?

Labor Migration to UAE - heading back to normal after recession

Labor Migration to UAE – heading back to normal after recession

One little piece of news published in Indian media speaks in the same line that I have been talking about. It highlights that workers below matriculation (i.e less skilled) are no longer going to the Gulf in high numbers. From 2008, when 88,389 workers qualified below matriculation left for the Gulf, the figure fell sharply to 21,129 in 2012. In 2011, number of less-skilled workers heading for Saudi, was just 4011. The news also attributed this to availability of more jobs at home and somewhat praised local Govt. The news for Bangladesh was similar, however, it became a tool for Govt criticism.

Coming to the headline, is it just pure “bad”-journalism case for the Economist to blame? In Freakonimcs, we saw a lot of often unrelated events and actions are tied up with numbers. But, numbers are often dangerous when any sudden change is explained with whatever the author believes or want to make the readers believe in. In this case, whether the author really believed that Govt actions (i.e. War Crimes Tribunal) promoted the fall in Saudi recruitment or wanted us to digest those and hinder the trial process of one of the most heinous Genocides of all times, is left to the readers to decide.

Data Sources :

1. ADBI Presentation

2. BMET

3. ADBI Report

Written by Diganta

August 22, 2013 at 10:07 pm

Posted in Bangladesh, India

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Women in Bangladesh and India – what Amartya Sen wanted to say

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Amartya Sen has recently (actually he’s talking about it for a while) commented that Bangladesh has taken over India in human development – at least in a couple of key health indicators and gender equality. I will try to add graphs and pictures to describe that, and also add another country (Nepal) stat to show that it’s not an accident.

The first and foremost, let’s look at the workplace. It’s a no-brainier that women in Nepal and Bangladesh participate in work more often than that in India. Too see it in charts -

Bangladesh-India-Nepal Female work participation

This has lead to more empowerment of women in Nepal and Bangladesh and that is the root cause of health related developments. This pattern stays forever, i.e. Nepal > Bangladesh > India was always there. This is mostly because lack of respect and openness in Indian society to allow women to work. I can put statistics about Pakistan and show they are doing worse in all those.

The next one is the most-discussed – the under 5 mortality rates.

India-Bangladesh-Nepal Under Five Mortality

The link between these two parts of the stats is obvious. The first part implies that more women in workforce leads to more empowerment of women and that again leads to better maternal health and that again implies more childcare. Bangladesh and Nepal did it better than what India did. Nepal, as predicted from the earlier statistics, did even better than what Bangladesh did.

This also effected in more generic statistics, such as Life expectancy.

India-Bangladesh-Nepal Life expectancy

Bangladesh was already ahead of India but was able to hold on to that gap. Meanwhile, Nepal did a catch-up, in fact a rapid one, to start below India and get to where Bangladesh is. Nepal deserves every bit of praise for achieving all that. But remember, it all stems from the first one – women are more likely to participate in work.

So, does it conclude that future of Indian social and health indicators are doomed. The answer is no – there are still grounds for development. But for the foreseeable future, India is likely to lag Bangladesh and Bangladesh will lag Nepal in all basic health indicators. This is despite India has more income per-person and more physicians per 1000 person than either of the countries. The fundamental reason is the empowerment of women.

There’s a tendency among news media and leftists to criticize India’s growth and point out that all money is going to a few hands. I see no such proof in numbers. Poverty rates are falling and people under poverty are getting better social security than there used to be a couple of decades ago. All that is made possible because Govt now has more money from tax revenues to invest in social development. I can see it in charts -

India-Bangladesh-Nepal income share of poorest 10% of population.

As we see in charts, there’s no significant difference in the poorest 10% income share of Nepal and Bangladesh compared to those in India. The share is falling slowly but offset by a healthier growth rate on the top. Also, to maintain context, this numbers in South Asia is one of the best in the world – Finland, Norway or other egalitarian countries are all close or sometimes even worse.

Hence I conclude that its women’s empowerment and not the growth or inequality is the key to getting better at basic healthcare. The problem is, this is a part of culture and it takes a while to change. To accept women at every workplace, people and popular mindset needs a sea-change from where it is right now. It takes time to improve conditions of women in a country with a culture of infanticide, discrimination and sexual abuses. For all practical purposes, Bangladesh and Nepal are going to finish the literacy and healthcare race ahead of India as well.

Written by Diganta

July 30, 2013 at 7:49 pm

Posted in Bangladesh, Culture, India

The Economy of British India – with Angus Maddison

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Angus Maddison is a world-renowned economic historian who is famous for his work on estimating the past GDPs of modern economies by different measures. I won’t go much details into his original work, but the pieces he wrote about Indian subcontinent are worth-reading. In this post, I will try to delve into his assessment of British rule in India (read the Mughal one also). Just to remind you, I am an Indian and Angus Maddison is a British national – so a difference in narratives (bias?) could be present in my write-up.

The Elitist British

The biggest change the British made in the social structure was to replace the warlord aristocracy by an efficient bureaucracy and army. In the first generation, British tried to Westernize India – introduced English education, tried out a few Social efforts and tried to modernize infrastructure. But soon they changed their course. Having failed to Westernize India, the British established themselves as a separate ruling  caste. They did not inter-marry, their kids grew up in separate schools and they socialized with separate clubs where “native” population was absent. Maddison compares -

“The British ruled India in much the same way as the Roman consuls had ruled in Africa 2,000 years earlier, and were very conscious of the Roman paradigm.

One of the positive sides of the whole thing was that the British never tried to settle down in India and remained low in number. This resulted in low taxation but Maddison described that it benefited the middle class and land-lords but not the bottom-of-the-pyramid peasants.

“There were only 31,000 British in India in 1805 … In 1911, there were 164,000 British … In 1931, there were 168,000. … The British had inherited the Moghul tax system which provided a land revenue equal to 15 per cent of national income, but by the end of the colonial period land tax was only 1 per cent of national income and the total tax burden was only 6 per cent. … Most of the benefits of the lower fiscal burden were felt by landlords, and were not passed on to the mass of the population. In urban areas new classes emerged  under British rule, i.e. industrial capitalists and a new bourgeoisie of bureaucrats, lawyers, doctors, teachers and journalists whose social position was due to education and training rather than heredity. In the princely states, the remnants of the Moghul aristocracy continued their extravagances – large palaces, harems, hordes of retainers, miniature armies, ceremonial elephants, tiger hunts, and stables full of Rolls Royces.”

The System of Exploitation

The main aim of British exploitation was to remit money to Britain. Again, as per Maddison, there were two phases of it. The British East India company had nothing but a short-term-profit-maker attitude while the British Kingdom had a long-term-rent-seeking approach. For example, Robert Clive, the East India Company General took quarter of a million pounds for himself as well as a jagir worth £27,000 a year. (worth mention comment from Maddison – British did not pillage on the scale of Nadir Shah, who probably took as much from India in one year as the East India Company did in the twenty years following the battle of Plassey.)

Comparatively, later on, the remittances became more smooth and systematic -

“the Viceroy received £25,000 a year, and governors £10,000. The starting salary in the engineering service was £420 a year or about sixty times the average income of the Indian labour force … Under the rule of the East India Company, official transfers to the UK rose gradually until they reached about £3.5 million in 18566, the year before the mutiny. In addition, there were private remittances … By the 1930s these home charges (i.e. remittances) were in the range of £40 to £50 million a year …  (also) About a third of the private profit remittances should therefore be treated as the profits of colonialism. “

Moreover, the Govt of India, which always ran fiscal surplus over the British Kingdom, ran into debts due to spurious reasons. Further, during the World Wars, Govt of India “gifted” (joke!!?) millions of pounds from its reserves to the British Govt. Maddison describes -

“In spite of its constant favourable balance of trade, India acquired substantial debts. By 1939 foreign assets in India amounted to $2.8 billion, of which about $1.5 billion was government bonded debt … (during World Wars) there were two ‘voluntary’ war gifts to the UK amounting to £150 million ($730 million). India also contributed one-and-a-quarter million troops, which were financed from the Indian budget.”

 Where Maddison differs

Maddison differs quite a bit on the topic of Industry. He countered arguments of R.C. Dutt, R Palme Dutt and Nehru on de-industrialization (i.e. the decline of the old handicraft industry without the compensating advance of modern industry) of India with his set of facts. He accepted the facts that the Mughals did have a large industrial base and with British rule and policies it died. But added an important quote -

“Oversimplified explanations, which exaggerate the role of British commercial policy and ignore the role of changes in demand and technology, have been very common and have had some adverse impact on post-independence economic policy”

Maddison argued that the Mogul Indian industry were to produce luxury goods for aristocrats. But after British rule begun, the higher echelons of Indian society were flipped upside down. The British officers and native “copycat” Zaminders had little attraction on the traditional Indian handicrafts. Instead they developed taste of British merchandise. Furthermore, with social changes in Europe, there were a decline in demand of handicrafts overall (not only Indian but also other European ones as well).  Along with that, cheap and better quality textile from Britain occupied Indian market. Maddison agreed that the above incidents probably threw a lot of Indians out of job but he adds that the per-capita textile consumption doubled due to cheap British imports. He explains -

“the displacement effect on hand-loom weavers would have been smaller than at first appears. The hand-loom weavers who produced a third of output in 1940 would have been producing two-thirds if there had been no increase in per capita consumption.”

But he, in the end, agreed that India was the net loser on textile industry due to long term colonial effects -

“In time, India built up her own textile manufacturing industry which displaced British imports. India could probably have copied Lancashire’s technology more quickly if she had been allowed to impose a protective tariff in the way that was done in the USA and France in the first few decades of the nineteenth century, but the British imposed a policy of free trade. British imports entered India duty free, and when a small tariff was required for revenue purposes Lancashire pressure led to the imposition of a corresponding excise duty on Indian products to prevent them gaining a competitive advantage.  … If India had been politically independent, her tax structure would probably have been different. In the 1880s, Indian customs revenues were only 2.2 per cent of the trade turnover, i.e. the lowest ratio in any country. In Brazil, by contrast, import duties at that period were 21 per cent of trade turnover.”

So the fundamental issue was on the “free-trade” without preparedness but not the British policies.

In fact Maddison threw light into a few different aspects of Indian industries. Britain used India as their Asian export Hub and that resulted in Indian industrial gain.

“By the time of independence, large-scale factory industry in India employed less than 3 million people as compared with 12 1/4 million in small-scale industry and handicrafts, and a labour force of 160 million.56 This may appear meagre, but India’s per capita industrial output at independence was higher than elsewhere in Asia outside Japan, and more than half of India’s exports were manufactures.”

So, even though Indian industry was small, it was better off most of its Asian counterparts. However, the industry relied on mostly British skilled workers to fill in the upper ranks and that (along with protective policies) led to a demise of Indian industries post-Independence.

Conclusion

Overall, as per Maddison, British urban economy was better off the Moghul one. It was more productive, modern and focused on  entrepreneurship. On the other hand, the condition of villages worsened because of “extractive” Zaminders, population increase and reduced per-capita land availability. The book overall is a fascinating read and I will probably write up another post to follow up on my evaluations and criticisms of Angus Maddison.

The primary resource - Class Structure and Economic Growth: India & Pakistan since the Moghuls (1971) by Angus Maddison.

Written by Diganta

February 7, 2013 at 12:40 am

2014 World T-20 – New Format

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I am glad to see a new format being implemented in ICC World T-20 coming edition. There are plus-es and minus-es of every format but I guess the new format raises the probability of the right teams to play in the semis as well as gets rid of redundant matches.

In 2012 edition of World T-20, Ireland complained that they got only a couple of matches and one of it was actually abandoned. The complain from India and New Zealand was that they were too close but eventually missed out on the semifinal berth. I am not sure whether or how much the new format tackles the latter, but I am sure it addresses the former one.

In the new format, six teams from the qualifier will join Bangladesh and Zimbabwe (last two places in World T-20 2012) to play in first round. Popular media is terming this as a qualifier but this will be a part of the main tournament with the fact that top 8 teams from the previous T-20 World Cup will escape it.  In the second part, which will be played in round robin league format, two of the teams from round one will join eight others and form two groups of five each. After this, probably usual semifinal and final will be played among top two of these five member groups.

This will provide an opportunity for the Associate and Affiliate nations to rub their shoulders with lower ranked teams from previous version of World T-20. The first round will probably played in two groups and each of the last two finishers in last edition will be placed in each of one groups. Let’s go over the situation in a bit details -

Qualifier – As usual. Let’s assume the six qualified teams are – Ireland, Afghanistan, Namibia, Netherlands, Scotland and Canada. (Going by 2012 edition of Qualifiers)

Full Teams - West Indies, Sri lanka, Australia, Pakistan, India, England, New Zealand, South Africa, Bangladesh, Zimbabwe (ranked based on position and net run rate in 2012 World T-20)

Preliminary Round -

Group A – Bangladesh, Afghanistan, Namibia, Canada (Team9 with Qual2,3,6)

Group B – Zimbabwe, Ireland, Netherlands, Scotland (Team10 with Qual1,4,5)

Let’s assume Bangladesh and Zimbabwe move to second round.

Second Round

Group A – West Indies, Pakistan, India, South Africa, Bangladesh (Team 1,4,5,8,9)

Group B – Sri lanka, Australia, England, New Zealand, Zimbabwe (Team 2,3,6,7,10)

Semifinal and Final.

So, straightway, Ireland is getting 3 matches with an opportunity to get to the second stage winning probably just one crucial match (against Zimbabwe).

Total matches – 12 in Prelims, 20 in second round and 3 in deciders. (Previously, 12 in prelims, 12 in super eight and 3 in deciders), i.e. 35 matches. I have seen news reports talking about a 35 match format.

I came across Bangladesh cricket fans not satisfied with this new arrangement mostly because Bangladesh will have to walk on tight rope against Afghanistan (possible next challenge in Prelims) and might be actually out of the tournament in case they lose it. However, I am convinced after seeing both teams (and Ireland too) that Bangladesh should have an easy win (so is Zimbabwe) at home soil. The Associate and Affiliate teams are still not up to the mark in the T-20 matches. However, after 2016, when the tournament will take place somewhere outside of subcontinent, things might change. But by 2018 the formats could change too.

The India-like situation (India lost one match and were out of semis) will less likely to happen in this new format given there are five teams instead of four in the revised format group stages. The same way, two tied-matches will less likely to impact semifinal chances (NZ like situation).

Written by Diganta

January 23, 2013 at 9:08 pm

Posted in Bangladesh, India

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Bangladesh Cricket Team Should Tour India

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I see there are efforts going on to arrange an India-Bangladesh bilateral series in India. While this should have been arranged years ago, I would say better late than never. We should all welcome the Bangladesh team to India and expect a good competitive series to be played here.

While a lot of people might not consider Bangladesh as a competitor, I would disagree. In the ODI format, recent record of the team is good. This includes back to back wins against India and Sri lanka backed up by another series win against T20 World Champion West Indies. On the other hand, current World Champion India is not doing badly at home too. India is scheduled to visit Bangladesh for a three match ODI series and a reciprocal series in 2013 would be the best fit. The target months could be July/August. India has a Zimbabwe tour (3 ODIs) in July and nothing in August (schedule).

India should ideally arrange a three-match ODI series with Bangladesh. If possible, there should be a couple of practice matches too. Though I would like to see these matches hosted in Eastern India, given the rain factor – Nagpur, Bangalore, Mohali, Hyderabad could be a better venues than Guwahati or Kolkata. However, Kolkata can definitely host a practice match between Bangladesh XI and Bengal XI and you may get a heavy crowd. Similarly, a match between Eastern Zone (current Duleep Trophy Champion) and Bangladesh XI in Guwahati might see a healthy turnaround. The last time these two played, East Zone won it by an innings and 149 runs but the Bangladesh team has improved a lot since then.

The pitch in India generally favors spin and Bangladesh should make good use of their top class left hand spinners. On the contrary, the new ODI rules (two bouncers and 5 fielders inside circle instead of 4) favors fast bowlers. Overall, I am waiting to watch a thrilling series.

Written by Diganta

January 22, 2013 at 10:43 am

Posted in Bangladesh, India, Sports

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Success of Diaspora – Does it imply a success of home country?

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There’s a lot of discussion around success of Indian diaspora outside of India. Previously, there were a few examples used to demonstrate that but with the arrival of more clear and concise statistics it’s obvious that Indians abroad are winning. They are ahead in education as well as in average income in the developed countries - wherever they migrated.

However the reason of this success was less discussed and so is its’ implication in India itself. I see Indians outperform immigrants from Bangladesh and Pakistan by a large margin. However when we consider the education index – I see all these countries are quite close, so is their HDI as per UN report. So, what’s going on?

First, let’s see the differences. There are a couple of things in place here. There is a gap between the performance of the country and the performance of diaspora. The gap can be explained by the channels used for immigration. Let me explain with an example. Let’s assume a class has a couple of sections. Let’s say there’s a Math competition between the two. Now representatives of section A is chosen by an exam conducted by the class teacher. The representatives of the section B were picked up randomly. Now, even if the sections show equivalent results in Annual Math exams, in the said Math competition section A will have an advantage. This is because they are using meritocratic channels to choose their representatives, rather than from a random sampling.

There are a couple of major channels used in immigration – the first one is via education and jobs, the second one is via family reunion and marriage. The former one is much more meritocratic channels than the latter. On the other hand, the latter is more “random” than the former. There’s a third non-meritocratic channel in case of USA (Diversity Visa) and that is purely random channel.

My first hypothesis is, the more meritocratic channels are used in a country-to-country migration, more the difference between home country and the diaspora. The theory is simple – people coming in to the foreign land with a work-visa will tend to earn more and will do better in education than one coming through family ties and marriage. Let me call this hypothesis selection bias.

The second hypothesis is more proportion of people comes in as immigrants – the more random the channels become. The simple example of section A and B can be used to explain this one. The section A has 20 students and section B has 100 students. If we choose top 10 from section A and top 10 from section B, we are providing a proportion bias to section B. If the student performance is distributed by a Gaussian curve (assuming meritocracy inside each section) then section B students will have an advantage if we look at their average scores – even if the average of whole class might be the same. Let me call this one proportion bias.

Let’s look at a couple of pictures.

UK Citizenship for people born in India, Pakistan and Bangladesh (2004-2011)

Settlement in UK - Indian, Pakistani and Bangladeshi Nationals (2009-2011)

Settlement in UK – Indian, Pakistani and Bangladeshi Nationals (2009-2011)

Now the USA residency distribution.

USA immigration for people born in India, Bangladesh and Pakistan (2010)

USA immigration for people born in India, Bangladesh and Pakistan (2010)

So, a couple of observation -

1) Indians get a selection bias advantage in both in USA and UK. In UK, both Pakistan and Bangladesh have almost same selection bias. In USA, Pakistan has a better selection bias than Bangladesh.

2) Indians enjoy a vast proportion bias. India, Pakistan and Bangladesh population are in proportion of 8:1:1 but the number of immigrants in UK is close to 10:8:3. In USA the proportion is a bit better – 11:3:2.5.

Now coming back to the topic, Indians abroad do well because they use meritocratic channels and get a proportion bias. The use of meritocratic channels is prevalent among Indians because of the large presence of MNCs in India. Microsoft in UK or USA will be more comfortable to hire another employee working for the same company in India. However, the similar opportunity is non-existent in either of Pakistan or Bangladesh. So, the success of immigrants has almost nothing to do with the average performance of the home country (though India produces more % tertiary educated people than either of Pakistan or Bangladesh), but with the channels used in immigration.

The funny thing is, the perception of home country abroad is largely based on its diaspora and that creates a positive feedback loop. More Indians doing good abroad will imply more MNCs will hire from India and the loop will continue until the average is hit (which will take time given the population). So, at least for the time being, Indians will enjoy reputation abroad of being high-paid and educated class.

Source -

UK Citizenship Tables

UK Settlement Data

USA Immigration Statistics

Written by Diganta

January 3, 2013 at 10:42 am

Posted in Bangladesh, India, Pakistan

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Bangladesh vs Myanmar : The Maritime Arbitration – Conclusion

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I wrote the article on Bangladesh-Myanmar maritime arbitration while it was in progress. The verdict is out in March and because of busy schedules, I was not been able to put up a decent informative article to follow up on the same. However, since I’m writing a couple of months later, I’ll focus less on the verdict itself, but more on the implications and reactions.

When I wrote about this arbitration, I was in confidence that Bangladesh will get something better than what was on offer by Myanmar’s negotiation on EEZ. But at the same time, I thought Bangladesh would get favorable verdict in continental shelf as well. I was right on the first one, where Bangladesh got better than equidistant but to my surprise, the continental shelf was also split into half. On the territorial waters front, Bangladesh didn’t have a strong claim and they didn’t win it. So, overall it was a mixed verdict for Bangladesh though more of victory and less of defeat.

Image courtesy a news article -

Bangladesh Myanmar settlement map

Bangladesh Myanmar settlement map

Why is this a Bangladesh victory?

The decision on EEZ was the most crucial one since that’s where potential of economic recovery of gas and oil resources are. So any shift of maritime boundary should be seen as a big win. The territorial waters are important but only a small part of the dispute. The continental shelf area is far away from the mainlands and more important as a fishing resource than gas-blocks.

The allegations against this common idea are centered around the fact that no major gas blocks from Myanmar are changing hands. One blogger from Myanmar also used the same argument (picture – see the red line for verdict, another source) to explain the same his countrymen. Indian media was also happy to note that Indian stake at Myanmar blocks are intact. To answer this, I would say Myanmar didn’t allocate blocks aggressively to the disputed areas and kept some buffer space in case the verdict didn’t go for them.  So an adjusted line was also out of their allocated blocks.

The second is more important one. A lot of people in Bangladesh argued that Bangladesh lost a proposed area as per their 1974 law named “The Territorial & Maritime Zones Act”. I mentioned it before also that 1974 law didn’t have any basis. It was declared unilaterally based on a floating baseline concept that never made into final UNCLOS in 1982. When the arbitration is fought on a law based in 1982, the local declaration of 1974 doesn’t add much of value. Unfortunately a string of misleading articles has been published in support of this view and I wrote against these claims long back. Bangladesh, understandably, did not argue anything on “floating baseline” in the arbitration and reduced their claim beforehand in order to get a favorable verdict. This strategic move definitely paid off. As I warned in the article before, the opposition will not be convinced of that approach so easily. That’s why most of these arguments are primarily motivated by political calculations.

A third team argued that the delimitation didn’t happen as per “equitable” rules, rather they happened on adjusted equidistant method. However, this allegation is attributed to lack of knowledge only. Equitable allocation often is synonymous with adjusting equidistant allocation with relevant circumstances. The only pitfall here is the adjustment didn’t happen to the extent Bangladesh wanted.

The extent of this victory

There are news sources quoting Bangladesh ministers (Dipu Moni) on getting more than what Bangladesh has asked for. This is not true. ITLOS verdict drew a line in Bay of Bengal to partition the rights of Bangladesh and Myanmar. However, the claims of Indian mainlands and archipelago will have its own claim and the area will be adjusted downwards. From the verdict (pg 141-143, para 499) we see

“The Tribunal notes that its adjusted delimitation line (see paragraphs 337-340) allocates approximately 111,631 square kilometres of the relevant area to Bangladesh”

However, it noted earlier that the relevant area was does not have anything to do with claims.

“The fact that a third party may claim the same maritime area does not prevent its inclusion in the relevant maritime area for purposes of the dis-proportionality test. This in no way affects the rights of third parties.”

And para 462 notes -

“The Tribunal therefore decides that the adjusted equidistance line delimiting both the exclusive economic zone and the continental shelf within 200 nm between the Parties as referred to in paragraphs 337-340 continues in the same direction beyond the 200 nm limit of Bangladesh until it reaches the area where the rights of third States may be affected.”

That means the claims made by the minister is exaggerated and based on wrong assumptions. I found one more scholarly article is quoting the same.

Interestingly, part of news media in Bangladesh assumed that Bangladesh has won as per 1974 claim and published articles/pictures based on those.

Avoiding the effect of St Martin Island on EEZ

While calculating EEZ, it seems that the effect of St Martin Island was not taken into consideration. This means India’s near-equidistant demarcation with Myanmar, Indonesia and Thailand makes sense. For the sea-boundary with those three countries, Indian claim was based on Andaman and Nicobar Islands. These islands would have got same or similar status of that of St Martin, had there been any real arbitration. Of course, someone can also argue that islands of Myanmar and Thailand were also given full effect while drawing the lines.

Some of the opponents in Bangladesh claimed that Bangladesh has lost its partial rights on the same island based on this verdict. That’s again an exaggeration as Bangladesh retained territorial waters surrounding the same island.

Impact on the other Bay of Bengal Case

Bangladesh and India are fighting to fix the rest of the boundary. Unfortunately, due to lack of public domain documents on that case, I won’t write on it. Still, there are few points I can think of  -

1) Bangladesh won’t be able to argue anymore that they don’t have the access to  international waters. That was their crux of argument in ITLOS. Now, they got it by the virtue of this verdict.

2) Bangladesh will be able to argue for similar regime for delimitation, i.e. an angular bisector at the river Haribhanga, that separates India from Bangladesh. However, learning from the court exercise, Bangladesh may also claim an adjusted equidistant line. The adjustment will be claimed showing lower economic status of Bangladesh (LDC country) and higher population density.

3) India will argue for an equidistant line. The proposed adjustment of Bangladesh will be resisted by India citing high-population, limited access of North-East India to sea and concavity of Orissa coast. India may also claim that Orissa and Bihar are India’s poorest states and they depend on the portion of EEZ in contention.

4) The court will probably draw an equidistant line and will make decision (based on strength of arguments) whether to adjust the line.

5) The amount of EEZ in dispute will be much less than that of Myanmar-Bangladesh dispute. The settlement area (area lost or gained) will probably be even less.

6) If Bangladesh doesn’t get satisfactory result from this dispute and if Awami League is running Bangladesh at that time, there will be a claim of treachery from the opposition.

7) The case will also decide on continental shelf delimitation. Now that we know of it in details, I believe the same line drawn for delimiting EEZ, will most likely be extended to delimit the continental shelf also.

Elsewhere

When China and Philippines are facing same or similar issue on sea limit delimitation, Bangladesh and Myanmar settled it in the court. Unlike India, China has said “No” to any court settlement and is pursuing hard-handed solutions to its neighbors and claims it has no obligation to go to the court. The difference of approach is significant since in the new world order, China has been seen as a semi-pole in what we call a Uni-polar world. To know more about the dispute, one can refer to this wiki entry, though the English wikipedia is largely banned in China. Apart from Philippines, Vietnam, Malaysia, Taiwan and Brunei are part of the same dispute.

References

1. International Maritime Boundaries, Volumes 2-3

2. View from Myanmar newspaper – link  and summary

3. The verdict

4. Prothom Alo report

5. Read an old article (second one) and understand what Bangladesh used to claim.

6. China’s invented history :) link

Written by Diganta

June 5, 2012 at 12:52 am

Post-Colonial Disparity

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I have been reading for a while about post-colonial world and how colonies were able to turn things around. The blog post from Jyoti Rahman made me think twice. Was it all correct?

Being Indian, the version I read and heard a hundred times from my childhood, was that Indian subcontinent along with a lot of other former European colonies were hammered quite heavily by colonialist masters. The sole reason of our current state of poverty seems to be related to our history, which has a couple of hundred years of colonial rule in its timeline. During this period, our raw resources were taken away and were used in factories across Europe to produce items for consumption of rest of the world. On the other hand, our local small industries were bulldozed with high restrictions and they soon mired into oblivion – leaving us a nation full of poor people. Little or no investment in Agriculture and food-distribution caused several famines during colonial rule. No effort for public education system left a bunch of illiterate people. To add on top of that, ever since we became independent, we are doing better and better, with more food, some industries and now the services industries to cheer about. There are multiple examples around us to justify this pattern. (Read an article by Amartya Sen on this topic)

To question this understanding, the first graphics I would refer to, is simply of growth of some of the countries post-independence. If I have to assume that it was raw materials from colonies that caused the growth in masters, then there should be an economic effect of increased availability of those resources in colonies post independence. And a scarcity of  the same should be causing growth to limp in the masters.

Colonies vs Masters in last 50 years

Colonies vs Masters in last 50 years

But the graph above shows absolutely the opposite. In last 50 years, colonies might have got little improvement of per-capita growth, but the gap between colonies and their  former masters has expanded at a rapid pace. This makes me comment that rather than we demanding our independence, the masters should have voluntarily freed our nations.

But then comes the next question, why is this disparity, even after the decolonization? There are two answers – one in the side of the masters, the other was from the colonies. After world-wars, the European nations were better of without colonies because they avoided one of the core reasons of their disputes – ownership of colonies. Post-world-war, Germany developed rapidly and this time they didn’t have a problem with other European countries, as they didn’t vie for colonies. There are no intra-state war (not even a proxy one) among Western European colonialists after the colonialism ended. Rather the cold-war kept them united.

The second reason would probably be attributed to a successful shift of their economy to tertiary one, which these countries already doing good at. With higher level of average education and skills in Science, they were bound to lead the world in services and innovation driven economies.

On the other hand, most of the colonies inherited better institutions than their previous native rulers have built (Indian institutions were far better in 1947 than what was left by Mughals in 1757). However, for most of these countries, strong nationalist sentiments drove them to success in the form of independence.  These sentiments, coupled with fear from recent-past experiences, made these countries extremely business-unfriendly. They became inward looking, anti-foreign-investment and invested most of the resources into less-productive sectors such as Agriculture and  small-scale industries. However, standard of living were improved in these countries in the form of health, education and social indices went up and towards the end of the graph, those start to yield some good results for them.

Now going back to where I started, were these colonies better off being never fallen into the grips of masters? I see point for and against it clearly. The points in favor of this view are discussed in the beginning. The points against it are also becoming clear. For example, between 1750 and 1947, the growth in the World economics were mostly fueled by manufacturing. There were new innovations all along the Europe and an active patent system to protect interest of investment on innovation. Indian rulers before the British did never thought of value of innovation, nor did they encourage it with more business. The culmination of pre-Raj Indian empires were said to be Akbar’s rule that created space for peaceful existence, but not even an iota of industrialization and literacy drive that one would expect in contemporary Europe. If you look at Akbar’s EU contemporaries, you’ll find Elizabeth of England and she appears to be much more farsighted than Akbar. Long later in 1857, Indians started their first war of independence with an objective of getting their old Mughal-Maratha rulers back but not for democracy, literacy, separation of church and state or modernization of infrastructure and institutions. India didn’t yet have enough decision-makers to think in those terms.

In summary, I feel we got what we deserved. Even if there were no such thing named colonization (which again was inevitable) or we were never colonized, we were having roughly the same standard of living that we have today. Whether we named our country as India, or were we have 20 different countries instead of three – are different questions and I can not address them. Guided by democracy with no political setup or autocracy with an extension of Mughal-Maratha-like empires would not have taken us far beyond where we are today.

Update -

Bangla Version with a lot of discussion.

Written by Diganta

June 3, 2012 at 1:42 pm

The Endless Blood

with 3 comments

I will go over all three major causes for India-Bangladesh border killings. I have summed up a few facts and possible directions.

Cattle count in India Pakistan and Bangladesh

Cattle count in India Pakistan and Bangladesh

Cattle trade has become the major root cause behind the regular border killings at India-Bangladesh border. In my first part, I will cover major causes of this illegal trade, possible way forward and some facts around it.

Facts -

1. India has the world’s largest cattle herd but hardly consumes any beef. Only two of the large Indian states allow cow-slaughter – Kerala and West Bengal.

2. Bangladesh cattle herd is stagnant over decades but people do consume beef.

3. These two factors make a natural direction of cattle flow from India to Bangladesh.

4. Approximately 1.5 million cows cross border every year. (Of course this statistics can not be verified.)

Given all these factors, it will be difficult to stop the trans-border cattle trade through an otherwise porous border. But there are a couple of scenarios which could put a break in illegal business.

First one, the cattle trade to be made legal and let market forces to guide it. This will mark the end of illegal cattle trade across the border. It will also allow cattle-owners to get fair price out of their cattle. The availability and business along with new investments in the cattle sector of India will be up. BSF, the major accused border guards of India, is a strong supporter of this.

However, this will face challenges, especially in India.

First, it will be a massive religious hurdle to cross. Predominantly Hindu India worships cow as a god and it will be politically challenging to implement this proposition. On the other hand, the fact that India exports cattle to Pakistan now-a-days, shows this religious forces are not as strong as people think of.

Second, it may hurt Indian beef and leather exports and will face anticipatory lobbying against this decision from those two sectors. It will be vehemently opposed by West Bengal, which sources 55% of Indian leather exports and 30% of Beef exports. Export of cattle will eventually mean export of leather and beef. If an excess of cattle crosses the border, then both of these industries will have to compete harder to ensure their supply of raw materials.

Now let me move to the next scenario. This would be a good one for India and the data indicate India is trying to move towards this. However, it would be a difficult-to-cope scenario for Bangladesh.

Under this situation, India becomes a large beef and leather exporter and the cattle doesn’t cross the borders at all. Instead they end up in large processing houses in West Bengal and be exported thereon as beef and leather. Since the cattle owner gets more from a standard licensed beef trader than an illegal cross border cattle trader, the majority of cattle doesn’t reach the borders. Along with this, enforcement at different levels should help divert the flow of cattle. Following is the beef export chart of India for last few years -

India Beef Export

India Beef Export

India is currently the fourth largest beef-exporter, ahead of the USA. But given the low consumption and huge cattle fleet, in no time they can become the top beef exporter. The dual utilization of cattle will also ease the pressure of price for the leather industry which exports $5bn a year. On the other hand, Bangladesh would have to import beef at a higher price as they have to compete with global prices (or prices in the Middle East – the major export destination of Indian beef). The leather industry, the second highest foreign currency earning sector of Bangladesh, would suffer from price pressure.

Given these two scenarios, it would be better for both Bangladesh and India to agree on a time-limited export quota of cattle, as India is exporting to Pakistan a maximum of 1 million per year from 2005. Meanwhile, Bangladesh should work on their domestic cattle and do the same that Pakistan did. It’s not that difficult in these days to multiply cattle and replace Indian supply with their domestic one.  The border population can themselves be engaged in raising cattle. Self-sufficiency has no alternatives and that will lead to best possible result.

Update -

1. Indian Planning Commission has already suggested to remove all barriers against beef-export (but not cattle export) in the next five-year plan. Indian right-wing Hindu organizations are already protesting it, but I will be surprised if protests gather steam. source : News

2. Indian beef exports to continue growing and India will become the third highest beef-exporter by 2012. It also notes that South-East Asia, North Africa and Middle-East are main destinations of Indian beef. source – News

3. I got hold of  11th Planning Commission report. It states -

“Since slaughter is a state subject, the actual processing of meat for exports as well as for domestic demand follow the laws of the individual states, which are at variance with each other. The country needs to have consistent and uniform slaughter policy across different states to make the industry competitive.”

It looks like India is going to become a large beef-exporter sooner that I thought of.

Update 2 

India is on course to become largest exporter of beef in 2012. The amount expected to be exported is 1.5 million tonnes, against 500,000 tonnes shown in the graph (year 2008). The addition comes through the export of buffalo-meat.

Further readings/sources -

1. http://www.rediff.com/news/2006/oct/13bdesh.htm

2. http://usda01.library.cornell.edu/usda/current/livestock-poultry-ma/livestock-poultry-ma-10-14-2011.pdf

3. http://ageconsearch.umn.edu/bitstream/92095/2/6-Anjani-Kumar.pdf

4. All chart data are from FAO database.

5. http://globalspin.blogs.time.com/2012/01/27/border-violence-tests-fragile-peace-on-india-bangladesh-frontier/

6. http://www.theatlantic.com/business/archive/2012/05/holy-cow-india-is-the-worlds-top-beef-exporter/257793/

7. http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDFfMjlfMTNfMV8yXzE1ODQyNA==

Written by Diganta

January 29, 2012 at 1:48 pm

Posted in Bangladesh, Economy, India, Stats

Tagged with , , , , , ,

Week of Shame

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In the shadows of back-to-back innings defeat at Australia, the national week of shame looms large on India. I was mentally prepared to write three different pieces to address them but snow in Seattle made me think otherwise. Lacking time, I have to compromise and settle down with a few words on each.

The Andaman Islanders were forced (lured?) to dance naked in front of tourists. I were probably more ashamed of this incident than if I were to do the same. What else could I say? These tribes were once lord of their own lands. Now, their land is gone, and the occupier is a client of capital. In this harsh world, they understood their asset and probably reciprocated. State is lawless? No, the law favors the deep-pockets.

A Bangladeshi cattle-trader was beaten like an animal failing to pay sufficient bribe to Indian Border guards (aka BSF). The captured video was allegedly distributed among villagers to install fear. The Human Rights gate-keepers engaged into worst violation of human (or even animal) rights and also allowed illegal operations to continue (as seen on video). To make it worse, BSF has decided to suspend the constables only after it was released by media. A part of media is now cooking up story that somewhere Pakistan is associated with this (don’t know how). Will an exemplary punishment (such as this) curb this kind of incident? Unlikely …

Coming back to the last one, the back to back innings defeats in Australia. The Indian media has spent far more newsprint on this one than that of the other two combined. Unfortunately, I don’t see much of tragedy in this. Cricket is by far a non-standard game, where the home team starts with a massive advantage. A defeat at home might be shameful, but a team of equal rank will probably beat the other at home. The same is true about the other two ongoing series – South Africa vs Srilanka and Pakistan vs England. Unless ICC takes some steps to standardize the pitches, these home-and-away-differences is going to stay. This is one more reason ODIs are better – at least most pitches follow some generic rules.

Only silver lining is that of journalism. I would thank a few fearless human-journalists to bring these to masses, especially to MASUM for creating awareness against BSF atrocities. But, one similarity between all of the above is more shameful. They are all going to repeat. Even if it may not in the same form, but in other forms – luring landless aborigines, torture by forces and away defeat in Cricket are going to stay as a part of Indian history and will take decades to fix. Till then we should prepare ourselves with a piece of cotton in ears.

Update : Now BGB (Bangladesh Border Guards) does what BSF is known to do – shoot and kill. BSF repeats the same to prove that they didn’t learn and will not learn.

Written by Diganta

January 20, 2012 at 11:11 am

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