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Expediting regional cooperation in trade and transport connectivity

Bangladesh is uniquely positioned to take advantage of its location in the Eastern sub-region of South Asia. It is a center point of different initiatives that seek to connect Bangladesh, Bhutan, India and Nepal (BBIN) with the ASEAN and other East Asian countries. With deeper trade, investment and connectivity linkages within the sub-region, Bangladesh can benefit from new markets, new import sources of high-quality and better-priced products, increasing opportunities for transport and logistics services.

Researches emphasized that the future line of connectivity must be on developing maritime infrastructure critical to promoting both intra and inter-regional connectivity and trade, as much for India as for the other South Asian nations.

Expediting-regional-cooperation-trade-transport-connectivity
Figure: Researches emphasized that the future line of connectivity must be on developing maritime infrastructure critical to promoting both intra and inter-regional connectivity and trade.

The connectivity by sea through the Bay of Bengal and the Indian Ocean is crucial in this respect. The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the India-Myanmar-Thailand Trilateral Highway, to build the missing links of the Trans-Asian Railway and the Asian Highway networks will play an important role in the future.

To enhance trade, Bangladesh has associated with some Regional Trade Agreements as follows[1]:

  • Asia Pacific Trade Agreement (APTA)
  • BIMSTEC Trade Negotiating Committee (TNC) meeting
  • SAARC Preferential Trading Arrangement (SAPTA)
  • The Agreement on South Asian Free Trade Area (SAFTA)
  • SAARC Framework Agreement on Trade in Services (SAFAS)
  • Standing Committee for Economic and Trade Cooperation (COMCEC)
  • Trade Preferential System Among the OIC Members (TPS-OIC)
  • Preferential Trade Agreement (PTA) among D-8 Countries (D-8)

Bangladesh is trying to engage in various sub-regional connectivity projects through road, rail and sea routes with India. These connectivity projects can create more trade opportunities for Bangladesh with the North-Eastern states of India. Also, India is interested in road and railway transit through Bangladesh as it would lower the cost and time to send goods to its north-east.

The Protocol on Inland Water Transit and Trade between Bangladesh and India initiated the Kolkata-Assam water route via Bangladesh for transportation of goods and providing infrastructural facilities.

Notably, Bangladesh and Nepal have extended the Protocol on Inland Water Transit and Trade which is not only enhancing trade but also facilitating greater investments in transport infrastructure through public-private partnerships. Under this agreement, Bangladesh will be allowed the use of channels for trade with India, Nepal and Bhutan.

Moreover, Bangladesh, Bhutan, Nepal and India (BBIN), a group of sub-regional countries in Eastern South Asia, signed a landmark Motor Vehicles Agreement (MVA) in 2015 for the regulation of passenger, personnel and cargo vehicular traffic among the four South Asian neighbors. The MVA, based on the EU model, has paved the way for seamless movement of goods and people across the border for the benefit and integration of the region and its economic development.

The MVA aims to connect the landlocked Bhutan, Bangladesh, Nepal and North-East Indian territories with the Chittagong and Kolkata port. Bangladesh and Nepal had launched a bus service through India on 24 April 2018 under MVA.

The Dhaka-Kolkata-Agartala bus service and Dhaka-Shillong-Guwahati bus service also started in 2015 under this agreement. Both Bangladesh and India agreed to consider introducing a new bus service linking Khulna-Kolkata and Jessore-Kolkata. Bangladesh and India are taking initiatives to revive the traditional rail routes to enhance the travel of passengers and transportation of goods.

Further regional connectivity between Bangladesh and its neighbors is expected in the implementation of the planned concept of ‘Blue Economy’ now that Bangladesh receives new marine territories as a result of the maritime verdict wins through arbitration against India and Myanmar.

Regional export at a glance: (Bloc/Group/Community – wise)[1]

(In million US $)

Bloc/Group/Community 2018-2019 2017-2018 Changes
(1-3)
Amount US Dollar % of total export Amount US Dollar % of total export
1 2 3 4 5
E.U. 17346 59.2 15975 59.7 1371
NAFTA 5621 19.2 4875 18.2 746
Other Asian Countries 1859 6.3 1754 6.6 105
OIC 1400 4.8 1541 5.8 -141
ACU 1102 3.8 880 3.3 222
SAARC 1064 3.6 832 3.1 232
Other European Countries 956 3.3 1041 3.9 -85
Developing Eight 704 2.4 797 3.0 -93
OPEC 578 2.0 596 2.2 -18
ASEAN 522 1.8 463 1.7 59
Other Countries 1230 4.2 1047 3.9 183
Total Export Receipts(excluding EPZ) 29311 26752 2559

 

Targets set in the 7th Five Year Plan to aid Bangladesh to be a connectivity hub

Source: 7th Five Year Plan, Planning Commission, GoB

Sectors Targets to achieve
Roads and Highways ·         Timely completion of important road links related to regional and multi-regional connectivity;

·         Construction of Padma Multipurpose Bridge that will connect the southwest part of the country to northern and eastern regions;

·         Conversion of nationally important highways into four-lanes;

·         Connecting important economic activity hubs, such as Payra Port and Economic Zones to national highways.

Railways ·         Continuation of reforming and modernizing railways;

·         Strengthening South Asia Regional and TAR (Trans-Asian Railways) connectivity through constructing a new rail track in the Bangladesh side of TAR.

Waterways ·         Construction of landing stations and river ports;

·         Construction of a new container terminal.

Airways ·         Construction of a new airport named Khan Jahan Ali Airport.
Port and Terminal ·         Construction of the third seaport at Payra in Patuakhali;

·         Construction of a seaport and Liquefied Natural Gas (LNG) terminal at Moheshkhali;

·         Construction of the third terminal at Hazrat Shah Jalal International Airport.

Ways to reap the benefit of regional connectivity for Bangladesh

It is needless to reiterate how Bangladesh holds immense potentials to be a connectivity hub between South and South-east Asia, between South and Central Asia, and between South and West Asia. However, there will always be challenges to hold back Bangladesh’s spree towards becoming a one-of-a-kind regional hub. Therefore, measures should be in place in terms of fall-back situations.

If we go by the avenues prescribed in the 7th Five Year Plan, the following action plans are imperative:

  • Completing all the identified high-priority projects, including completion of the Padma bridge; conversion of important highways into four lanes; connecting important ports and economic zones to highways; completion of constructing the Payra seaport, the Moheshkhali LNG terminal and the Khan Jahan Ali airport; strengthening Biman’s fleet capacity and management quality.
  • Completing critical transport links in road, rail and river ways that are related to promoting regional and multi-regional connectivity.
  • Addressing security challenges and identifying relevant solutions to ensure safe transportation.
  • Setting a logical pricing policy for using transit/transshipment through Bangladesh’s territory.
  • Developing a balanced 3R (rail, road, river) based multimodal transportation system.
  • Participating actively in all regional and sub-regional connectivity forums.

Apart from the 7th Five Year Plan, the government needs to expedite other issues as well, such as:

  • Learning from best practices of multilateral and regional cooperation mechanism;
  • It is useful to maintain an awareness of possible risks which could derail our desired growth trajectory and afflict us with the miss-the-bus syndrome which has characterized some erstwhile economies rated as potential but subsequently becoming off-course[1];
  • We need to ask ourselves about our strategic strengths and weaknesses and assess trends and situations in our immediate neighborhood and on the regional and global scene. Such exercise is important for setting strategic priorities targeting the maximization of our national interests, especially economic and developmental interests.
  • We also need to hold public debates and carry out substantial research for supporting Bangladesh’s interests in regional connectivity or in exploiting the potentials of the blue economy.

References: 

[1] Ministry of Commerce, GoB

[1] Bangladesh Bank

[1] https://ibtbd.net/creating-opportunities-2/

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