These unique markets are ‘changing relations and reducing incentives for smuggling’, reveals a new report by the financial institution
Guwahati: In 2011, when India and Bangladesh opened a ‘border haat’ (small market along the border) at Kalaichar in Meghalaya’s West Garo Hills district, it had not just revived a 40-year-old practice of direct trade but also made people-to-people contact possible, which had remained almost snapped since the birth of Bangladesh in 1971.
Success of the initiative prompted the two neighbouring countries to open three more ‘border haats’ -- one at Balat along the Meghalaya border and two at Kamlasagar and Srinagar along the Tripura-Bangladesh border to give the bilateral trade a further boost.
Nearly eight years after Northeast India and Bangladesh opened the first ‘border haat’, a recent World Bank report has now hailed the concept as it found that the border haats are “changing relations and reducing incentives for smuggling”.
“Historic ties in areas along the Bangladesh-India border have meant that goods, especially essential agricultural commodities, have always been traded in these areas. However, once the hard borders were established, fenced, and strictly policed, much of the legal trade was truncated and replaced by informal trading and smuggling, some of which involved skirmishes. An initiative by the governments of Bangladesh and India aimed at recapturing the once thriving economic and cultural relationships is now changing relations, reducing incentives for smuggling and resulting peace dividends. This is occurring through haats, that is, local border markets,” said the report titled, ‘A Glass Half Full: The Promise of Regional Trade in South Asia’.
The report prepared by a World Bank group advocates an approach of open regionalism, using intra-regional trade as complementary to, and as a stepping stone for, deeper global integration.
The study found that border haats have had a disproportionately large and positive impact on welfare in local communities on both sides of the border through three channels. First, a gain in real income and the creation of livelihood opportunities, including among women and some of the most marginalised workers, as well as benefits for buyers, second, improved cross border relations through deeper people-to-people contacts and third, a reduction in informal and illegal trading and the resulting peace dividend.
“The border haats offer a significant supplementary source of income. Among Indian vendors, 97.5 per cent saw substantial increases in income, while the corresponding share was 67.5 per cent among Bangladeshi vendors. The haats have created jobs for transporters, labourers, and providers of ancillary services and boosted their incomes. These opportunities are also open to women, and, although uptake is affected by socio-cultural constraints, women’s participation can be encouraged by affirmative action, capacity building, better haat infrastructure, and easier access to the markets. Border haats help consumers in rural border regions by providing a wider variety of goods at cheaper prices, goods for which there is inherent local demand and supply complementarity. Many of these goods are basic food items—otherwise less available throughout the year—and simple household goods,” said the report.
Buoyed by the “success” of the haats, India and Bangladesh recently decided to open six more such border haats by March next year. This is despite the “trust deficit” over alleged illegal migration of Bangladeshis to Assam and rest of the Northeast with many policy makers stressing that the political issues should not be allowed to affect trade and cultural relations. Assam, Meghalaya, Tripura and Mizoram share 1,880km border with Bangladesh.
Cross border relations
The World Bank report further said the border haats have improved cross-border relations in supplying spaces for people to meet, reconnect, or establish fresh social and economic ties. “Social mixing is a large part of what a haat offers. Groups of people with a shared history have reconnected, including some families that had been separated for years. Over half the Indian respondents have a positive view of Bangladeshis, and an overwhelming proportion of Bangladeshi respondents express a positive view of Indians, views they attribute to their exposure to their Indian neighbours at the haats,” it said.
The border haats has also reduced the informal and illegal trade and thus resulted in peace dividend. “Bangladesh–India border trade has always thrived, especially in essential agricultural commodities. According to Indian state government officials, informal trade was rampant before the border haats were created.
In formalising informal trade and reducing smuggling, the haats have contributed to the peace dividend and provided relief to agencies from the need for strict policing of these regions. The authorities could reflect on ways to scale up border haats systematically. The study shows clearly that border haat trade comprises a very small proportion of formal trade that would continue to be small even if the initiative is scaled up appreciably.
“Haat trade does not detract from formal trade, given volume limitations, which make it unattractive for more organized traders. It also has a disproportionately positive impact on the livelihoods of people in nearby border regions. It similarly provides a bigger peace- and relation-building dividend because of the face-to-face contacts involved,” said the report.
The report, however, stressed that the authorities could streamline procedures, improve facilities, and enhance the use of technology. “Most people who participate in the haats are poor or very poor. Even small gains can be valuable to them. Currently, the haats are characterised by poor sanitary facilities, especially toilets; lack of running water, including drinking water; and substandard approach roads. These shortcomings exert a disproportionate impact on women and the poor,” the report said. All users of haats, including women and the poor, would benefit from steps to minimise theft, expand opportunities for productive activities, cut down on transport costs, and so on, steps that are spelled out in some detail in the study.
The report stressed that the local and national authorities could consider ways to capitalise on the opportunities that haats offer to enhance women’s participation. Unlike formal trade in South Asia, wherein women traders are not highly visible, the haats have enabled women, particularly in Meghalaya, to participate actively as vendors and buyers. Much more is possible, even in societies that are not matrilineal.
“The study offers several suggestions to boost women’s participation and ease their access to haats through modifications in haat design, the choice of location of new haats, operational guidelines to streamline the functioning of haats, capacity building for wider participation in haats, and infrastructure upgrading. So the countries in South Asia could deliberate on the possible replication of the haat experience in the context of other land borders in the region, given the unambiguously positive experience of border haats in Bangladesh and India,” the report said.