Home ›› 23 Feb 2022 ›› Opinion
The cherished graduation from LDC to a developing nation in 2026 will ultimately make Bangladesh lose GSP facilities. Though challenging, Bangladesh has to push duty-free made-in-Bangladesh products in the international markets. The cost and sufferings of failing to avail of duty-free facilities during the post-LDC era will eventually fall on Bangladesh. It is high time to take precautionary steps in battling against any untoward situation. According to a recent study carried out by UNCTAD, Bangladesh might lose around 14.28 per cent or US $ 5.73 billion worth of export earnings annually after its graduation to a developing country. So, to address probable trade challenges, implementing the Motor Vehicles Agreement among Bangladesh-Bhutan- India-Nepal is crucial. Moreover, modernization of existing land ports has become a burning issue in relation to expanding foreign trade to help moderate the post-LDC challenges.
Manila-based lender, Asian Development Bank (ADB) is very positive about foreign trade growth in the days to come upon modernization of land ports. The ADB made the projection that foreign trade volume is likely to increase by 50 per cent on condition of reform and trade facilitation works. Mainly, complex customs and clearing procedures and slow pace in cargo-handling inland ports have become critical barriers to expediting foreign trade. As a result of long-lasting problems in the inland ports area, Bangladesh finds it challenging to improve its score in ease of doing business index prepared by the World Bank (WB). There are 181 customs stations in Bangladesh for the purpose of land ports. Around 24 land customs stations have been declared as land ports and 12 are now operational. It is important to say that Bangladesh does trading with Myanmar through only one land port.
According to media reports, the Asian Development Bank will provide US $144.5 million for the purpose of frontier ports’ modernisation works with India and Myanmar to expand high-volume international business. Nevertheless, Motor Vehicles Agreement can expedite foreign trade among Bangladesh, Bhutan, India, and Nepal.
The Motor Vehicles Agreement (MVA) was signed on 15 June, 2015 in the transport ministers meeting held in Bhutan. Bangladesh, Bhutan, India, Nepal (BBIN) were signatories of MVA. Against the backdrop of the need for seamless passenger, personal and cargo movements, MVA was signed. BBIN MVA is expected to ensure sound cross-border vehicular movement with passengers and goods and services. The purpose of MVA was to increase people-to-people contact and enhance a wide range of trade and economic cooperation among Bangladesh, Bhutan, India, and Nepal.
Unfortunately, the landlocked country Bhutan withdrew from its decision following Bhutanese people’s mass movement against the much-discussed agreement. Pollution from vehicular movement coupled with environmental degradation in Bhutan boosted the movement. In view of the opposition against MVA raised by the Bhutanese people, the parliamentary committee is in a wait-and-see move for the time being. It is hearting that Bhutan, in the meantime, gave its nod to join the MVA shortly. Bhutanese leaders took the decision in the wake of regional leaders’ requests in recent times.
Over the last several years, India-based CUTS international carried out studies on BBIN MVA economic prospect. The study reveals that eight designated BBIN corridors are set to minimise the time and cost of doing trade. According to the Organisation for Economic Cooperation and Development (OECD), a 10 per cent improvement in transport and trade-related infrastructure quality can increase agricultural exports of developing countries by 30 per cent. It has been observed that BBIN MVA is moving at a snail’s pace since its inception. Experts believe that country-to-country road connectivity will definitely help emerging economies go ahead. Prime Minister Sheikh Hasina is now seeking speedy implementation of BBIN MVA for regional economic integration. She met her Nepalese counterpart KP Sharma Oli at 18th NAM Summit in Baku, Azerbaijan, where the issue was given high importance in the discussions.
There are regular bus services between Kolkata-Dhaka, Shillong-Dhaka, and Agartala-Kolkata via Dhaka. A new bus service (Dhaka-Khulna-Kolkata) was launched during PM Sheikh Hasina’s visit in April 2017. According to this writer, the Bangladesh, Bhutan, India, and Nepal- Motor Vehicles Agreement is expected to boost connectivity by road significantly. The trial run of cargo movement on trucks from Kolkata to Agartala via Dhaka and Dhaka to New Delhi via Kolkata and Lucknow was conducted in August 2016. Afterward, the tri-nation bus service on a trial-basis among Bangladesh, India and Nepal was also conducted in April 2018 for implementation of MVA.
Bangladesh approved the draft of the ‘Memorandum of Understanding prepared by India but Nepal did not agree with it. So, the need for coordination is a must among the four countries’ leaders. After 2018 trial run of the tri-nation bus service, no development was noticed regarding the inauguration of regular cross-border vehicular movement among three countries under MVA. As part of the move for MVA implementation, a Joint Working Group (JWG) meeting was held on Bangladesh, Bhutan, India, and Nepal (BBIN) MVA in New Delhi in 2020. The purpose of the meeting was to finalise the BBIN MVA protocol- the passenger Vehicles protocol and the Cargo vehicles protocol. The primary goal of MVA is to develop functional transport corridors and subsequently convert them to economic corridors.
What is worrying is that trade volume among Bangladesh, Bhutan, India and Nepal still leaves much to be desired. Bangladesh’s economy runs ahead with significant contributions from European countries in terms of importing goods from Bangladesh. According to reliable sources, Asian countries imported Bangladeshi goods worth only Tk 15,352 crore during the year 2015-2016. In contrast, European Union member countries, the member countries of NAFTA, Developing Eight, ACU member countries and other non-Asian countries are importing more. Bangladesh now exports goods worth $ 1.5 billion to India and imports merchandise worth over $ 8.5 billion from that country. According to state-run Export Promotion Bureau data, Bangladesh last year exported products worth $ 38 million to Nepal and imported around $ 18 million of goods while only $14 million in 2018-19 fiscal year. According to EPB export receipts in July-June, 2017-2018 from Bhutan US$ 4.38 million where US$ 45 million from Nepal, US$ 873 million from India.
In view of trade volume among four economies, the resumption of 1,100 km route Dhaka-Rangpur-Banglabandha-Siliguri ( India)- Kakarvitta (Nepal)–Bharatpur-Kathmandu under MVA is needed. Prime Minister Sheikh Hasina placed BBIN MVA issue on the table while talking to visiting leaders of India, Nepal and Bhutan. It is good to know that while the Bhutan parliament has yet to ratify the BBIN protocol, the other three countries are moving ahead to implement Motor Vehicles Agreement. South Asian visiting leaders, while staying in Dhaka to celebrate the Golden Jubilee of Bangladesh’s independence and Bangabandhu’s Birth Centenary, have agreed on implementing BBIN MVA shortly.
The recently launched rail link with India (Rohanpur-Singhabad route) aiming to carry passengers and goods between Bangladesh and Nepal is a milestone for regional connectivity. If rail connectivity with Bhutan, through Chilahati-Haldibari, is established, sub-regional trade volume is set to be increased. Bangladesh now needs to join the India-Myanmar-Thailand Trilateral Highway project in order to be connected with Southeast Asia by road. In this regard, India’s approval is necessary. For the materialisation of BBIN MVA, Bangladesh should keep eyes on infrastructure development in designated cross-borders stations. Speedy execution of customs procedure has to be ascertained. Besides, a separate parking zone for vehicles waiting to finish customs formalities must be established. Holding timely secretary-level meeting for resolving MVA related problems is needed. In order to address financing problems for implementation of BBIN MVA, financing from donor agencies might be arranged. Currently, the Asian Development Bank (ADB) is providing financial support to the BBIN MVA initiative as part of its assistance to the South Asia Subregional Economic Cooperation (SASEC). Besides, under the SASEC, the ADB has promised to release the funds under ‘Integrated trade facilitation sector development programme’. Let us take steps to refurbish the frontier ports and materialise BBIN Motor Vehicles Agreement as soon as possible.
The writer is an economic affairs analyst and PhD Fellow.
He can be contacted at mazadul1985@gmail.com
