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20 September, 2018 01:22:55 AM
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Bangladesh can double trade with S Asian countries: WB

STAFF REPORTER
Bangladesh can double trade with S Asian countries: WB
Finance Minister Abul Maal Abdul Muhith, World Bank lead economist Sanjay Kathuria, World Bank country director for Bangladesh Qimiao Fan, pose with the publication of WB’s new report in the capital yesterday. photo: courtesy

Bangladesh has the potential to more than double its trade with the South Asian countries by reducing manmade trade barriers while the increased regional trade can accelerate the country’s growth and create more jobs for men and women, says a new report of World Bank (WB).

By reducing man-made trade barriers, trade within South Asia also can grow three times, from $23 billion to $67 billion, said the report.

The report titled “A glass half full: The promise of regional trade in South Asia” produced by the World Bank was launched yesterday in the capital. Finance Minister Abul Maal Abdul Muhith unveiled the report.

The report documents the gap between current and potential trade in South Asia and provides a roadmap for deepening regional trade.

Sanjay Kathuria, World Bank lead economist and lead author of the report, said trust between countries is in shot supply in South Asia. “Border haats between Bangladesh and India, aimed at recapturing the once thriving economic and cultural relationships are mow changing cross border relations,” said Kathuria.

He said haats are not just about trade. They are about using trade to foster people to people connect and trust.

“South Asian policy makers can aim to reinforce the virtuous circle between trade and trust—the experience of Bangladesh India haats offer several useful insights into the context,” he said.

The report recommends targeting sensitive lists and para tariffs to enable real progress on South Asia Free Trade Areas (SAFTA) and calls for a multi-pronged effort towards addressing non-tariff barriers, focusing on information flows, procedures and infrastructure.

The report also suggests that policy makers draw lessons from the India- Sri Lanka air services liberalisations experience, where liberalisation was gradual and incremental, but policy persistence paid of.

Connectivity is another key enabler for robust regional cooperation in South Asia, according to the report.

The report identifies four critical barriers to regional trade: tariffs and para tariffs, real and perceived non tariff barriers, connectivity costs, and a broader trust deficit.

Intra-regional trade in South Asia remains one of the lowest in the world and accounts for about five percent of the region’s total trade, compared with 50 per cent in East Asia and the Pacific. Bangladesh’s trade with South Asia is only nine percent of its global trade.

Qimiao Fan, World Bank country director for Bangladesh, Bhutan and Nepal said Bangladesh can become an economic powerhouse by deepening regional and global integration in trade, connectivity, energy and investment.

“For increased regional trade, the country needs to focus on improving its trade policy regime, which currently has a strong anti-export bias.”

The costs of trade in South Asia are much higher within South Asia compared with other regions: the average tariff in South Asia is more than double the world average. South Asian countries have greater protection for imports from within the region than from the rest of the world.

Countries impose high para tariffs, and more than one-third of the interregional trade falls under sensitive lists, comprising goods not included under South Asia Free

Trade Areas (SAFTA)’s tariff liberalization.

In the case of Bangladesh, nearly 46 per cent of its imports from South Asia fall under sensitive lists.

Countries in this region are yet to reap the benefit of shared land borders. This arises from deficiencies in border regimes, including limited information flows on nontariff measures, and the inadequate use of modern clearance procedures.

Limited air connectivity makes regional trade and investment costlier, added the report.

EA

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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