Roads not right for transit now
Finance Minister AMA Muhith yesterday prioritised improvement in infrastructure to benefit from transit to regional countries.
“Roads and railways need to be improved in at least three countries -- Bangladesh, India and Bhutan. But it is not possible right away,” he said at a public-private dialogue on enhancing trade facilitation in South Asia in Hotel Sonargaon.
The discussion took place at a time when Bangladesh is set to provide transit facilities to India, Nepal and Bhutan with the objective to facilitate trade in the South Asia region, home to 22 percent of the world's population.
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and International Finance Corporation (IFC) jointly organised the event. Mahbubur Rahman, president of International Chamber of Commerce, Bangladesh, chaired the session.
Muhith said four issues including rules of origin and harmonisation of customs rules and procedures are important to facilitate trade in the region. But the most important is the transport boost.
Businessmen at the discussion said changes in the mindset of all regional governments, especially of the largest economy India, is the key to boosting intra-regional trade in South Asia, constituting only 5 percent of the total trade of the region.
To boost Saarc intra-regional trade, currently the lowest in the world, entrepreneurs also want the governments to harmonise rules and standards and sign mutual recognition agreements to allow goods from one member country to the other without barriers.
They suggested the governments undertake liberal trade facilitation policies as well as initiate public private dialogues among government agencies and businesses of Saarc countries to harness the economic potential of South Asia.
''Mindset is a big issue in the region. Unless there is a change in the mindset, it will be very difficult to increase trade,'' said FBCCI Director Md Fazlul Hoque, at a session on Trade Logistics in South Asia.
Hoque, also former President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), referred to economic and political power of India and said it has created an imbalance in power in the region.
Despite geographical proximity, South Asia's intra-regional trade remains meagre compared to other regional trading blocs such as Asean, where intra-regional trade is 27 percent.
FBCCI President AK Azad linked the slow growth to prevalence of tariff and non-tariff barriers, lack of appropriate level of trade facilitation and slow development of connectivity, infrastructure and communication linkages.
Citing India, Bangladesh's largest trading partner in South Asia, FBCCI Director MA Momen said India could play a major role in enhancing regional trade.
Momen, however, said mere signing of agreement to strengthen economic cooperation will not improve the situation, unless a coordinated effort to change our mindset towards a prosperous regional trade is put in place.
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