A lost chapter in Bangladesh-Pakistan diplomacy

Altaf Parvez

Bangladesh’s diplomacy is like an old-fashioned wall clock with a pendulum, swinging back and forth. For the past one and a half decades, it had tilted to one side, but now it may be time for a change in direction. In the recent past, relations with many countries were unusually “good,” while with others, they deteriorated. Now, efforts are underway to correct these “abnormal” chapters. At this time, efforts are also being made to revive the lost communication in the bilateral relationship between Bangladesh and Pakistan. There has been an increase in conversations between diplomats and politicians of both countries.

2024 marks the 50th anniversary of mutual recognition between Bangladesh and Pakistan. This moment is quite a celebratory one. At such a “favorable moment,” as efforts are being made to rebuild the relationship, a natural question arises: will the old sensitive issue of Bangladesh’s outstanding dues with Pakistan be settled? This is a fundamental unresolved issue in their relationship.

European countries have been functioning together in a union for 31 years. Unfortunately, the countries of South Asia have had a different experience. They initially separated into several entities and have not been able to form a union like the EU, nor have they managed to maintain even normal bilateral relations in many cases.

Even a small conflict leads to the imposition of stricter visa policies on each other’s citizens. Due to such “teenage” mentality, expected commercial and cultural relations have not progressed.

The Bangladesh-Pakistan relationship has suffered from similar misfortune. Pakistan’s export business with Bangladesh is less than $100 million, and only one-five-hundredth of Bangladesh’s total exports goes to Pakistan. Though Pakistan is somewhat ahead in this regard, high tariffs from Bangladesh have made it difficult for Pakistani goods to enter the country. Over the years, the flow of goods from Pakistan has been closely monitored as a political decision. For a long time, there have been no direct flights from Pakistan International Airlines (PIA) to Dhaka.

Such a situation clearly needs to change. Together, both countries represent a market of over 400 million people. Normal diplomatic relations could open up significant opportunities for both nations. Pakistan could become a good market for Bangladesh’s products, ranging from raw jute to pharmaceuticals. Recently, business chambers from both countries have formed a new council to increase trade. However, it is difficult for businessmen alone to smoothen interstate relations; only politicians can do that.

To move forward, Bangladesh and Pakistan must address their old debts and unresolved issues. A significant obstacle in the past was the issue of Urdu-speaking people stranded in Bangladesh. Since Bangladesh granted them voting rights, Pakistan is now somewhat freed from this responsibility. The government of Dhaka has shown considerable generosity on this matter, and today’s Urdu-speaking generation is less inclined to move to Pakistan.

Another unresolved issue concerns the division of post-independence resources. Although this issue hasn’t been discussed for a long time, it will need resolution to move the relationship forward. From Bangladesh’s perspective, the people have a legitimate claim to these resources, and no policymaker can ignore this demand.

Pakistan and Bangladesh were united for 24 years. After their separation, the division of economic responsibilities naturally arose. These include sharing foreign assets, the foreign currency held in Bangladesh before the war, the surplus generated from exports and imports during the period of East Pakistan, and the receipt and repayment of foreign debts. There is also the matter of compensations for the war victims.

However, due to the political emotions and tensions following 1971, this crucial task was not carried out dispassionately and remains unresolved. Although 54 years have passed, it is a matter that the leaders of both countries must resolve in one way or another.

There are many precedents in international law regarding the division of state legacy after partition, the birth of new states, or the unification of two regions. Bangladesh and Pakistan can take guidance from these conventions to reach a satisfactory resolution on this disputed issue.

In December, during the D-8 summit in Egypt, Bangladesh’s interim government’s chief advisor, professor Muhammad Yunus, met with Pakistan’s prime minister Shahbaz Sharif. He appropriately mentioned that “old issues keep resurfacing, and to move forward, the unresolved matters must be settled, especially for the sake of future generations.” They had met earlier during the UN General Assembly as well.

During Nawaz Sharif’s tenure in the past, Pakistan showed the most positive attitude toward bilateral issues. In this light, it can be said that now is a good moment for both countries to move forward in their relations. This is also an opportunity.

Since independence, many Bangladeshi politicians and intellectuals have called for the settlement of old debts. During the war, Pakistan had reserves of about $4.25 billion, part of which many have claimed should be Bangladesh’s share.

In 1972, then prime minister Sheikh Mujibur Rahman raised claims on this issue. During Zulfikar Ali Bhutto’s visit in 1974, formal discussions on these debts took place, with Bangladesh presenting a claim for $4 billion.
Later, Bhutto suggested that Bangladesh should also share the foreign debts from before 1971. Even though this was a negative approach, it acknowledged the rationale behind the division of assets, and Bangladesh agreed to take on a part of undivided Pakistan’s foreign debt, amounting to around $360 million.

Under pressure from creditors, Bangladesh agreed to this decision. Bangladesh was positive from the beginning about advancing relations with Pakistan. However, Bangladesh’s acceptance of foreign debt from undivided Pakistan was related to the financial division at that time, and a resolution would need to come in a package.

Although discussions on debts were halted after 1975, in 1978, Shamsul Haq, the foreign minister of Ziaur Rahman’s government, also raised the matter. While the Pakistani government initially remained silent on this issue, later Pakistan’s businessmen began raising concerns about compensating for their abandoned businesses in Bangladesh.

This added complexity to the issue of state legacy. However, there are many elements worth listening to in the views of Pakistan’s industrialists and businessmen. The Bangladeshi government later took some corrective actions in response. But the Pakistani government has always been unwilling and unclear in addressing the state legacy of debts, and at times has used the issue of assets abandoned during the war to deflect attention from the matter.

Such conflicting claims are an obstacle to healthy bilateral relations. What is needed is a solution where both sides can make concessions and receive something in return. Expectations are high that Pakistan’s foreign minister’s upcoming visit to Bangladesh will lead to positive progress on this matter.

It is true that after the war, many industrial assets of West Pakistan were nationalised in Bangladesh. The Karachi Stock Exchange later made a record of these industries. For such assets, there is a need for extensive research to determine whether the post-war government in Bangladesh managed these properties correctly, how they were distributed, and where these assets are now.

For many, this may seem like opening a Pandora’s Box, but avoiding the responsibilities of history is truly difficult. What could have started in 1972, is still an issue that cannot be avoided in 2025. At least, if relations with Pakistan are to progress, these matters will inevitably come to the fore. Even if governments try to avoid them, questions may be raised by non-governmental entities, and if avoided entirely, they could emerge in international forums.

In the past, the return of Urdu-speaking people and the issue of war crimes overshadowed Bangladesh-Pakistan bilateral talks. Now that Bangladesh is handling the issue of Urdu speakers on its own terms, Pakistan may come up with positive proposals regarding the settlement of debts. Even if both countries feel embarrassed to discuss these matters directly, they could seek technical assistance from the UN or the OIC.

Such initiatives would speed up potential commercial, diplomatic, and geopolitical cooperation. However, current efforts to normalize relations should not be held back by the division of debts. Bangladesh has already taken steps to import 50,000 metric tons of rice from Pakistan, among other goods, signaling an expansion of bilateral ties.

Nevertheless, any normal relationship requires a transparent understanding of past wrongs. The future’s sustainability depends on past justice. In particular, the international assistance sent to East Pakistan during the November 1970 cyclone, which was not distributed due to the outbreak of war four months later (amounting to nearly $200 million), could serve as an immediate and inspiring precedent for Pakistan.

In recent history, relations couldn’t be continued even after elevating bilateral relations with India to great heights due to the unresolved Teesta water-sharing issue. Unresolved economic issues from before 1971 will inevitably resurface in the Bangladesh-Pakistan relationship. People might even wonder: if water-sharing can become an international issue, why not economic debts?

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