Possibilities of economic cooperation between Nepal and Bangladesh

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Although Nepal and Bangladesh are neighboring countries, trade and economic relations between the two are negligible. We are conscious of promoting trade and economic cooperation based on equality and mutual benefit, but the reality is we have not been able to expand our bilateral trade.

Nepal and Bangladesh have enjoyed excellent bilateral relations since the establishment of diplomatic relations in April 1972. Relations between the two countries are based on harmony, goodwill, mutual understanding, and cooperation. It can be felt that Nepal and Bangladesh have an important and separate role to play in the promotion of trade, tourism, and investment in the bilateral, regional and international arena as well.

Nepal and Bangladesh have recently had similar problems in the category of LDCs and Bangladesh has recently graduated to the status of a developing country. That is why both countries can solve common problems by learning from each other to use trade and other economic tools to address the needs of the people and our country collectively.

As both Nepal and Bangladesh are members of the WTO, BIMSTEC, and SAARC, the use of such international and regional forums can enhance regional and bilateral trade and create investment opportunities.

Earlier, meetings of the SAARC Council of Ministers had decided to implement other projects connecting Kathmandu with Chittagong, India through Bangladesh. Nepal hopes that such an international transport connectivity project will further strengthen regional integration and alliances.

Although Nepal and Bangladesh are neighboring countries, trade and economic relations between the two are negligible. We are conscious of promoting trade and economic cooperation based on equality and mutual benefit, but the reality is we have not been able to expand our bilateral trade. Therefore, we must launch an effective and joint program to increase the volume of our trade and strengthen the economic ties. After Covid-19, this possibility and potential has become even deeper.

According to the Mechi Customs Office, more goods were imported from Nepal's eastern border point of Kakarvitta than were exported to Bangladesh in the last fiscal year. The trade deficit has been high due to declining exports of Nepali goods and increasing imports of Bangladeshi goods every year.

Nepal used to export more agricultural products than imports, but with the increase in customs duty by the Bangladesh government, exports of major commodities exported to Bangladesh such as lentils, herbs, ginger, etc. gradually declined and the trade deficit increased.

At present, Nepal is exporting pulses, ginger, Chiraito, herbs, sesame seeds, and pulses to Bangladesh, while importing jute, potatoes, plastic products, washing machines, medicines, soybean seeds and drinks, machinery materials, batteries, readymade garments, tissue paper, and others from Bangladesh.

Nepal is participating in Bangladeshi trade fairs. Similarly, Bangladesh is organizing a single-country trade fair in Kathmandu. This is especially important when the economic situation of the country is not satisfactory. It not only promotes Bangladeshi products but also helps Nepali entrepreneurs to explore potential areas of a joint venture with their Bangladeshi counterparts.

In the common interest of our economic development, Nepal, and Bangladesh, considering the existing problems, should make effective use of the Kakarvitta-Phulbari-Banglabandha route and extend it to the port of Mongla. The full use of the Banglabandha Road connecting the Mongla Port will not only increase the volume of third-country trade between our two countries, but it will also develop a new dimension in bilateral trade between Nepal and Bangladesh.

Extremely adventurous tourism in Nepal depicts the potential for fun tourism. Flights to Bangladesh from the eastern part of Bhadrapur, Nepal should also be regular and effective to encourage border tourists.

As both the countries have decided to sign the Cargo Transport Modality Agreement, we can expect all types of public and private vehicles to come and go from Nepal and Bangladesh.

Nepali agricultural products have a great opportunity to be exported to Bangladesh such as dairy products, spices, vegetables including tomatoes, green peas, cucumbers, sweet peppers, ginger, cardamom, apples, oranges, pears, strawberries, pulses, lentils, etc. But to be competitive in these products, Bangladesh should encourage imports from Nepal in terms of bilateral trade.

Nepal could also export products such as stones, boulders, and freshwater fish to Bangladesh as Bangladesh has great potential to become a major market for these Nepali products. Concerning investment in Nepal, there seems to be a strong possibility of foreign investment in Bangladesh in the financial sector, information technology, tourism, etc.

Nepal's private sector believes in people-to-people contacts to boost economic ties and trade between the two countries. To facilitate regular communication between the Nepali and Bangladeshi people, it is necessary to visit and exchange information at the private sector level and also increase participation in fairs/exhibitions organized in both countries.

Nepal should learn a lesson from the successful use of Bangladesh's microfinance concept. We thank Dr Muhammad Yunus for his tireless efforts in this regard. In this regard, in a program organized a few years ago in Nepal, Prof Yunus delivered a remarkable speech that reminds us of the importance of bilateral relations.

Another possibility to strengthen trade relations between the two countries is the construction of a gas pipeline from Bangladesh to Nepal. Adequate gas in Bangladesh will not only alleviate Nepal's gas problem but will also help make Bangladesh prosperous. As the world goes through huge ups and downs, our allies, who have easy access to each other, need to be able to run their business easily.

Nepal and Bangladesh have concluded a Memorandum of Understanding (MoU) to remove technical barriers (TBT) to expand trade between the two countries. Now, the two sides will observe quality certification procedures and lab operations to address issues related to product quality in each other's countries, as the MoU paves the way for the signing of a Mutual Accreditation Agreement (MRA) for the recognition of each other's laboratory certification in the coming days.

Nepal and Bangladesh have finalized the list of primary market access products in the respective countries. Nepal has agreed to provide primary market access to 500 Bangladeshi goods, while Bangladesh has agreed to provide similar treatment to 108 Nepali goods. The list of goods for market access has already been prepared and the modality needs to be implemented effectively.

The Bangladesh government will improve the condition of the Jamuna Bridge connecting Mangala Port in Bangladesh. After the Government of India agreed to facilitate the movement of vehicles in the Phulbari-Baglaband corridor, the two countries agreed to improve the land customs facility by expanding the volume of trade in the future.

Again, both the countries have agreed to bring the Singhabad (India) -Rohanpur (Bangladesh) rail transport facility (provided by India) into operation. Apart from Rohanpur-Singhabad transit, Nepal has urged Bangladesh to convert Radhikapur (India) -Birol (Bangladesh) railway line to broad gauge. In response, Bangladesh seems to have intensified the work of converting the broad gauge railway line.

In addition, the two countries seem to have agreed to simplify the visa and immigration process for tourists traveling through land routes to promote each other's tourism. The two countries have also agreed to participate in each other's trade fairs and have been participating in fairs and exhibitions.

Kathmandu-Dhaka bus service was also included in the agenda of the talks. However, it is already being discussed under the BBIN (Bangladesh-Bhutan-India-Nepal) Motor Vehicle Agreement.

In addition, vegetables and herbs are exported to Bangladesh. As the demand for vegetables and fruits increases, Nepal needs to focus on such products. Bangladesh has been increasing its exports to Nepal every year but Nepal has not been able to do so. Bangladesh exports more than 20 products including medicine, solar, raw jute, jam, powdered milk, and potatoes to Nepal.

Assistance in hydropower
Bangladesh is keen to develop hydropower projects in the eastern part of Nepal through joint ventures. The Prime Minister of Bangladesh said that Nepal's huge hydropower potential could be utilized for the mutual benefit of the countries in the region. The Bangladeshi foreign minister reiterated Bangladesh's desire to import 1,000 MW of electricity from the Koshi High Dam project to meet their ever-increasing demand for electricity. The meeting helped to understand the development, status, and demand of hydropower in the two countries for further assistance in the hydropower sector. Bangladesh has worked toward proposing and implementing Joint Working Groups (JWGs) from each country, including India, Bhutan, and Nepal.

Air service agreement
Bangladesh’s State-owned airline Bangladesh Airlines and GMG - Bangladesh's private airline - were assigned to expand their services to the Kathmandu and Dhaka regions.
Source: https://myrepublica.nagariknetwork.com

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