Annette Dixon (AD), the World Bank’s vice-president for South Asia, gave an interview to The Daily Star on the sidelines of the first South Asia Economic Conclave, currently being held in the Indian capital.
TDS: How will the recent initiatives aimed at sub-regional connectivity involving India, Nepal, Bhutan and Bangladesh benefit Bangladesh's economy when they are implemented?
AD: Let's put this within the broader context: sub-regional connectivity involves initiatives not only in terms of infrastructure and trade facilitation but also trade policy and foreign direct investment.
Bangladesh is uniquely positioned to take advantage of its location in the Eastern sub-region of South Asia. It will be a centre 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.
Increased trade can contribute directly to investment and job creation, in manufacturing, agriculture as well as services.
In promoting increased trade, one should be aware that there will be winners as well as losers from greater transit and trade integration, as is always the case in any reform programme.
Initiatives to help businesses as well as affected workers may be needed, even as the country as a whole stands to gain significantly from greater sub-regional cooperation.
TDS: What challenges might these sub-regional initiatives face in case of execution?
AD: There are three sets of challenges: capacity, coordination, and policy.
Significant implementation capacity as well as knowledge support will be required for all participating countries.
There will be coordination challenges both internally within countries and regionally across borders.
As facilitating transport and trade connectivity is a multi-sector, multi-agency effort, all the relevant ministries, departments and agencies within a country will need to coordinate seamlessly.
Private sector stakeholders will also need to be engaged. Similarly, at the regional level, the BBIN countries will need to coordinate both at the political level as well as at the technical level.
The recent agreements and protocols to improve regional connectivity will require changes in national policies and legal frameworks.
Drafting the appropriate policies and getting adequate stakeholder support can take time, and the governments can use knowledge and capacity support, including understanding the good practices from around the world to replicate.
Also, new initiatives are needed to harmonise trade policies and quality standards and attract foreign investment including from within the sub-region.
TDS: What is the World Bank's plan for providing financial and technical support to help implement these initiatives?
AD: The WB has projects under implementation as well as in the pipeline in support of regional connectivity in all four countries.
In Bangladesh, the World Bank is preparing a connectivity project on inland waterways as well as a regional connectivity project that will support road and multi-modal connectivity efforts.
TDS: Fixing transit fees for connectivity is a crucial issue. What is the global practice in this regard? What should the four countries do in fixing the transit fee?
AD: There are well-known global conventions under the World Trade Organisation. The General Agreement on Tariffs and Trade (GATT) Article V provides principles for regional transit. Many regions in the world have successful transit arrangements.