'Transport connectivity can drastically boost economies of India, Bangladesh'

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Seamless transport connectivity between India and Bangladesh has the potential to improve national income by as much as 17 % in Bangladesh and 8 % in India, says a new World Bank report.

Titled "Connecting to Thrive: Issues and Opportunities of Transfer Integration in Eastern Southern Asia", the survey contends that increasing transport connectivity between the several countries could enhance exports even further, yielding a 297 % increase in Bangladesh's exports to India and a 172 per cent increase in India's exports to Bangladesh.

Previous analysis indicates that Bangladesh's exports to India could increase by 182 per cent and India's exports to Bangladesh by 126 % if the countries signed a free of charge trade agreement.

"Geographically, Bangladesh's location helps it be a good strategic gateway to India, Nepal, Bhutan, and other East Asian countries. Bangladesh may also become an economic powerhouse by improving regional trade, transit and logistics systems," said Mercy Tembon, World Bank Region Director for Bangladesh and Bhutan.

"While trade between India and Bangladesh has got increased substantially over the last decade, it is estimated to be $10 billion below its current potential," Tembon said, adding: "The Environment Bank is supporting the government of Bangladesh to strengthen regional and trade transit through several investments in regional highway and waterways corridors, priority territory ports, and digital and automated devices for trade."

Today, bilateral trade accounts for only about 10 per cent of Bangladesh's trade and a mere 1 % of India's trade. In contrast, in East Asian and Sub-Saharan African economies, intraregional trade makes up about 50 % and 22 per cent of total trade, respectively.

"In fact, it really is about 15-20 per cent less costly for a company found in India to trade with a good company found in Brazil or Germany than with a company in Bangladesh, the report points out. High tariffs, para-tariffs, and non-tariff barriers as well serve as major trade barriers. Simple common tariffs in Bangladesh and India will be a lot more than twice the world normal," the World Bank article said.

The report analyses the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Contract (MVA); com­pares it with intercontinental guidelines; and identifies its strengths and gaps for smooth regional connectivity.

The report also discusses regional policy actions the countries can take to fortify the MVA and proposes priorities for infrastructure investments that can help the countries maximize its benefits.

The World Bank report says :

"Weak transport integration creates the border between Bangladesh and India thick. Crossing the India-Bangladesh border at Petrapole-Benapole, the most crucial border post between your two countries, takes several times.

" In contrast, enough time to cross borders managing identical volumes of traffic in different regions of the community, including East Africa, is significantly less than six hours, the article highlights.

"The eastern sub-region is poised to become an economical growth pole for South Asia. A significant component of this production potential is certainly for countries to purchase connectivity - rail, inland waterways, and roads," said Junaid Ahmad, Globe Bank Region Director in India.

"This is especially true as the region starts its monetary recovery from the Covid-19 pandemic. Ultimately, connectivity supplies the promise of long-term sustainable and inclusive growth."

At present, Indian trucks aren't allowed to transit through Bangladesh. Consequently, the northeast of India is specially isolated with all of those other country and connected just through the 27-km-vast Siliguri corridor, also known as the "chicken's neck".

This leads to long and costly routes.

Goods from Agartala, for example, travelling 1,600 km through the Siliguri corridor to attain Kolkata Port instead of 450 km through Bangladesh. If the border were open to Indian trucks, products from Agartala would need to travel just 200 km to the Chattogram Interface in Bangladesh, and the transfer costs to the port would be 80 per cent lower, the report estimates.

According to the report, all districts in Bangladesh would reap the benefits of integration, with the eastern districts savoring larger benefits in real income. Says bordering Bangladesh such as Assam, Meghalaya, Mizoram, and Tripura in the northeast, and West Bengal on the west, and says further away from Bangladesh such as for example Uttar Pradesh and Maharashtra would as well gain huge financial benefits from seamless connectivity.

However, unleashing the entire potential of integration in your community requires strengthening the contract signed in 2015.

Countries need to address several challenges such as infrastructure deficits, particularly found in designated border articles, harmonization of restrictions and customs procedures, the article says.

"The transportation integration agreements in eastern South Asia represent a substantial stage toward the creation of a cross-border integrated transport industry in the sub-area, with the Motor Vehicles Agreement (MVA) appearing the cornerstone of this integration.

The agreement can achieve full potential by adopting good practices; addressing gaps and inconsistencies in infrastructure and industry failures in transport companies; and adopting complementary plans that remove binding constraints due to market imperfections," stated Matias Herrera Dappe, Senior Economist and Charles Kunaka, Lead Private Sector Professional and authors of the article.

The report recommends key plan actions countries should try strengthen the MVA.

These include:

* Harmonising driver's licensing and visa regimes

* Establishing a competent regional transit regime

* Rationalizing and digitizing trade and transportation documents

* Liberalizing selecting trade routes

The report also causes the following policy recommendations to boost regional connectivity:

* Standardize infrastructure design

* Expand the effective capability of core transportation and logistics infrastructure along regional corridors

* Ensure competition in transport service markets

* Deploy modern it infrastructure at terrain ports and seaports

* Develop off-border custom clearance conveniences in Bangladesh and India

The following complementary interventions would help spreading the benefits associated with regional transport integration to local communities, the report adds:

* Connecting local marketplaces to regional corridors

* Removing logistics bottlenecks found in export-oriented value chains

* Bettering women's participation in export-oriented agricultural benefit chains at the macro, community, and household levels

The opening of a fresh bridge on river Feni connecting Tripura to Bangladesh's Chittagong port has been hailed as a game-changer for India's Northeast as it keeps out the promise of ocean usage of the landlocked hill region.

The bridge was nearly inaugurated recently by Primary Minister Narendra Modi and his Bangladesh counterpart Sheikh Hasina.

Modi's go to to Bangladesh later this month is probable.
Source: https://www.daijiworld.com

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