# **Box 1. Bangladesh and India: A Tale of Two Border Regions**

India’s North East and West Bengal lag behind the rest of India in per capita gross state domestic product (GSDP). So do the Bangladesh districts adjoining West Bengal and India’s North East. India’s North East and Bangladesh districts bordering the above region and West Bengal have considerable similarity like being predominantly agricultural- agriculture accounting for the largest share of employment; narrow manufacturing base; and low levels of consumption of electricity which significantly constrain their growth prospects. The three hill districts of Bangladesh have large shares of tribal population, so do three states of India’s North East, and people of both these sub-regions have been practicing the same low productive agricultural technology featuring shifting cultivation called _Jhum_ for generations. The two regions formed a single economic entity under the British rule, shared common infrastructure and developed close linkages which contributed to economic growth of both the regions. Partition of British India in 1947 into two separate states, India and Pakistan, and the two regions falling in two countries which did not maintain friendly relations, caused havoc to the economy of India’s North East, as sudden snapping of all economic linkages made its economy extremely vulnerable besides converting it into a virtually land locked region. The adjoining Bangladesh (then East Pakistan) districts also suffered by losing their traditional sources of supplies and markets for their products, but as they retained most of the common infrastructure including access to the sea, and thereby to the outside world, their situation was not as bad. Their growth performance, however, indicate that they performed relatively poorly compared to most other Bangladesh districts. So did Bangladesh districts bordering West Bengal. With the emergence of Bangladesh as an independent country in 1971, it was expected that the linkages earlier lost would be restored, but little progress has been made so far in this direction. It is, however, believed that improved economic linkages between India’s North East and West Bengal, and the adjoining Bangladesh districts, would promote development of all these regions.

_Source:_ Massum (2008).

A second and related vulnerability is the access to water for irrigation and transport. An estimated 400 million people, many of whom are poor, directly or indirectly depend on the water flows of the three mighty rivers of Indus-Ganges-Brahmaputra for their livelihood. Frequent water shortages (and floods) create serious challenges to maintaining the income level of these large numbers of poor.

A third vulnerability is exposure to conflict and violence. It is not accidental that border regions are more prone to conflict and violence than other parts of South Asian countries. Indeed cross-border conflicts in South Asia are both a cause and effect of lack of cooperation. The poor suffer most the consequences of these conflicts. The peace dividends from resolving these conflicts through regional cooperation can be a huge boost for poverty reduction in South Asia.

# **IV. Regional Cooperation for Supporting Development of South Asia’s Lagging Regions**

Cooperation can be a powerful way of raising growth, reducing the gap between leading and lagging regions, and reducing vulnerabilities for the poor. By focusing on the income of the poor both through the growth mechanism and by reducing vulnerability, regional cooperation can be helpful in lowering income inequality. Specifically, in the context of the framework developed in Section III, it can be argued 17