Bridging Borders: How Bangladesh Can Benefit From Stronger ULA/AA Ties

By Admin 06 Dec 2024

Written By Myo Nyein Naing

Bangladesh's relationship with Myanmar has always been defined by a complex, yet crucial, economic partnership. Since the establishment of the Border Trade Agreement in 1996, bilateral trade between the two nations has steadily increased. From 2018 to 2021 alone, Bangladesh exported approximately US$31 million to Myanmar and imported US$141 million annually. While both countries benefit from this exchange, Myanmar typically gains more, exporting significantly higher volumes of goods than it imports.

Bangladesh's imports from Myanmar mainly consist of agricultural products such as rice, beans, garlic, ginger, onions and livestock, while Myanmar turns to Bangladesh for more industrial products like pharmaceuticals, textiles, and iron and steel. However, a closer, more strategic partnership between Bangladesh and the United League of Arakan (ULA) and Arakkha Army (AA), which now controls most of Arakan (Rakhine) State in Myanmar, could unlock untapped potential for both sides.

The Strategic Importance of the ULA for Trade

Arakan State, which shares a physical border with Bangladesh, is pivotal to this bilateral trade. The proximity of the two regions has made border trade a cornerstone of their economic exchanges, with about 40% of Myanmar's exports to Bangladesh and 29% of its imports from Bangladesh flowing through this border. With almost full control over Arakan State, the ULA holds the keys to significantly enhancing these trade flows. In many ways, the ULA has the unique ability to streamline trade policies and offer Bangladesh greater access to a smoother, more efficient trading process.

Infrastructure development must be a priority for both parties to ensure that goods flow without unnecessary delays or losses. If the ULA and Bangladesh invest in better roads, ports, and customs facilities, the cost of trade will decrease, benefiting traders on both sides. This could be especially important for Arakan State, where inefficiencies in trade and infrastructure have long been barriers to growth.

Moreover, the ULA can help stabilise prices and reduce inflation in Arakan State by facilitating the importation of key goods. Increased access to industrial products - especially iron, steel, and electronics - would be critical for Arakan State's industrial development. Arakan State remains underdeveloped in its industrial capacity, and a trade agreement with Bangladesh reflective of current realities would be an opportunity to close that gap. Beyond economic benefits, enhanced trade could serve as a platform for the ULA to earn taxes from both importers and exporters, creating a new source of revenue for the region. Lower taxes would also incentivise traders from both countries to increase their exchanges.

Navigating the Complexities of Sovereignty and Security

However, the potential for a stronger Bangladesh-ULA partnership does not come without complications. The future of Arakan State is uncertain, especially with the influence of the AA, the dominant military faction in the region. Should the AA solidify control over Arakan State, Bangladesh would face a tough decision: Should it recognise the sovereignty of the AA or continue to engage with the Myanmar's State Administration Council (SAC), which still has authority over other parts of Myanmar?

The answer lies, in part, in the urgent issue of the Muslim Rohingya refugee crisis. Bangladesh has been burdened for years by the presence of over a million of these refugees, fleeing violent persecution in Myanmar. The AA is central to any potential resolution of the crisis, as it is the one entity with a degree of control over the situation in Arakan State. If Bangladesh is serious about facilitating the return of Muslim refugees to Myanmar, the AA is the only realistic partner in the region.

Some analysts argue that Bangladesh should turn to Myanmar's National Unity Government (NUG) to resolve the Muslim issue. But this would be a fruitless attempt. The NUG, despite its vocal advocacy for Muslim rights, has no real influence in Arakan State and has limited capacity to effect change on the ground. The NUG's calls for urgent international intervention in Arakan State in terms of the Muslim Rohingya crisis when the AA seized control of Buthidaung, without observing what was actually going on, led to a controversy.

For Bangladesh, engaging directly with the AA over the Muslim crisis makes much more sense. The AA is not only the actor with the most influence in Arakan State, but also a potential partner in securing border areas to combat illicit activities like drug smuggling, which is another security concern for Bangladesh. Establishing a cooperative relationship with the AA would be a practical step toward ensuring better security and stability at the border, which could help both sides achieve their broader goals of economic and social development.

Bangladesh Must Decide: AA or SAC

The time is ripe for Bangladesh to reconsider its approach to Myanmar, particularly in light of the evolving situation in Arakan State. Strengthening ties with the ULA could yield significant benefits for both trade and security. The ULA, with its growing influence in Arakan State, could offer Bangladesh the stability it needs to expand its economic relationship with Myanmar while also addressing the humanitarian crisis that has affected the region for years.

In this new chapter, the Bangladesh government must look beyond the State Administration Council and engage with the AA, whose influence over Arakan State is undeniable. This pragmatic approach could not only help resolve the Muslim crisis but also foster a more prosperous future for both Bangladesh and the people of Arakan.

In short, bridging borders isn't just about increasing trade; it's about finding common ground for lasting peace and development in a region marred by conflict and division. Bangladesh's future relations with Arakan State will depend on its willingness to make difficult but necessary choices for long-term stability and growth.

About the author: Myo Nyein Naing is a university student majoring in quantitative economics and political science at St. Olaf College in the United States.