ADB's $48m fund for smooth movement of goods
The Asian Development Bank (ADB) is providing $48 million to help goods move more smoothly in and out of Bangladesh, Bhutan, and Nepal, by overhauling time-consuming, costly and often opaque customs procedures that are inhibiting intraregional trade.
The Manila-based lender also signed a deal yesterday to provide $300 million in loans to help Bangladesh stabilise its financial markets to make them more attractive places to invest.
Iqbal Mahmood, senior secretary of the Economic Relations Division (ERD), and M Teresa Kho, country director of ADB's Bangladesh Resident Mission, inked the deal at the ERD in the capital.
â€œRemoving many non-tariff barriers which currently impede trade will have a major multiplier effect on trade volumes across South Asia,â€ Emil Bolongaita, public management specialist in ADB's South Asia Department, said about the $48 million fund.
â€œAutomated, user-friendly, transparent customs systems will cut business costs, reduce informal activity, and give a real lift to importers and exporters, including women entrepreneurs,â€ said Bolongaita.
The project will help the three countries, all members of the South Asia Subregional Economic Cooperation (SASEC) programme, adopt an international customs administration protocol, upgrade existing automated customs management systems, and establish web-based electronic trade portals.
These measures will give importers and exporters timely and accurate information, ADB said in a statement yesterday.
India, which is also a SASEC member, is not included in the programme as it is funding its own trade facilitation reforms and is significantly ahead of its neighbours, according to the statement.
The programme, which targets a 7.5 percent rise in intraregional trade volumes by 2018, will complement SASEC cross-border transport projects to improve connectivity, and planned investments in projects across the transport, trade facilitation and energy sectors.
ADB, which acts as the secretariat for SASEC, has already provided $3.4 billion and has more commitments in the pipeline, according to the global lender.
SASEC was set up in 2001 as an initiative of Bangladesh, Bhutan, India, and Nepal with an aim to promote domestic and regional prosperity through stronger transport links.
About the $300 million loan, ADB said the assistance will also strengthen capital market reforms to improve financial stability by reducing concentration in the banking system, and mitigate the negative impact that financial market instability has on the real economy and the plight of the poor.
The assistance for the Second Capital Market Development Programme will pursue, among other issues, demutualisation of the stock exchanges, strengthening the Securities and Exchange Commission, and boost the insurance sector.